Republicans in the Michigan Legislature Wildly Exaggerating Savings From Same-Sex Benefits Cuts

by P.D. Lesko

Michigan Republicans want to see House Bill 4770 and House Bill 4771 signed ito law by Governor Rick Snyder. The bills would prohibit public employers from including domestic partner benefits in their public employee compensation packages, and would make domestic partner benefits a prohibited subject in collective bargaining. According to a piece in the Detroit News, “The bill is in response to a rogue move by the Michigan Civil Service Commission earlier this year that provided taxpayer benefits to unmarried housemates of public employees and their families.”

Many Democrats who voted for Republican Rick Snyder, presidents of the state’s public universities, as well as LGBT groups and activists are holding their breath, collectively, hoping Governor Snyder will veto the legislation before the end of the year. Would “Ann Arbor’s” Rick Snyder sign into law a bill aimed at cutting off 138 people who work for the state from health insurance for partners and children?

Yes, currently, there are 138 public employees in Michigan who take advantage of the opportunity to insure their dependents. That’s a whopping .00418 percent of the state’s 33,000 benefit eligible public employees. Cutting off these people would save the state a bundle, so say the politicos. The fiscal analysis that accompanied the introduction of the legislation by Republican David Agema reads like an Elmore “Dutch” Leonard pot boiler, pure fiction.

State mainstream media and political analysts have focused on whether Snyder will protect the autonomy of the state’s public universities rather than scrutinizing the off the wall $8 million dollar “fiscal impact” projected should Snyder sign the bill.

In September 2011 staffers who work for Mary Ann Cleary, who heads the House Fiscal Agency, provided a legislative analysis that projected “Under House Bill 4770, the fiscal impact to the state would be a savings of the estimated $8.0 million in costs for providing such benefits to state employees beginning with Fiscal Year 2011-12. For those who may not be math savants, that’s a calculated cost of $57,971.01 in benefits for each of those 138 employees, or a monthly cost of $4,831.92 for health care coverage per employee per month. The three who did the “analysis” must have graduated from the Detroit Public Schools.

First of all, what in the world is the State of Michigan doing giving any employee $57,971.01 in healthcare benefits? Second of all, how in the world did Mary Ann Cleary pull $8 million in savings out of her muffler?

In June 2011, just a few months before McCleary’s projections were revealed, under former director Mitchell Bean, the House Fiscal Agency staffers put together an analysis to accompany House Bill 4087, sponsored by Representative Joel Johnson. His legislation aimed to amend the Michigan Legislative Retirement System Act (MCL 38.1050b, 38.1075, and 38.1079) to modify retirement health insurance benefits for legislators and lieutenant governors who were first elected after November 1, 2010. In that analysis, it was calculated:

In FY 2009-10, the MLRS spent $5.3 million to provide health insurance benefits to 348 retired members and their dependents. Of that total, members contributed approximately 2.9% and the MLRS paid the remaining costs through current employer contributions and investment income.

In June 2011, health insurance for 348 retired members of the Michigan Legislature and their dependents, all over the age of 55, cost $5.3 million per year, or $15,229.88 per retiree ($1,269.15 per month). Three months later, in September 2011, health insurance for 138 current public employees was calculated to cost $8 million per year, or $57,971.01 per employee ($4,831.92 per month).

So which of these two analyses is to be believed? A2Politico turned to the National Conference of State Legislators a bipartisan nonprofit organization that studies such matters.

According to the most recent data compiled by the National Conference of State Legislators, “For 2009 the average cost of an individual health insurance policy for a state employee in the United States is $502.43; with the state paying an average of $447.79 (89%) and the employee is responsible for the remainder, which is an average of $56.52.” Family coverage offered to public employees by the state of Michigan cost $1,314.28 per month as of 2009, according to research from the NCSL.

The latter figure is, of course, a fraction of the $4,831.92 per month for health care coverage as calculated by The House Fiscal Agency staffers providing analysis of the fiscal implications of Agema’s legislation. It is very close to what the House Fiscal Agency revealed the state pays per retired legislator.

Let’s tap the brick wall and go deeper into this Republican fiction, into Diagon Alley, where the magic folk crunch the numbers in the House Fiscal Agency. Let’s assume for a moment that cutting off 138 public employees from covering dependents with state-provided health care will save $8 million gold galleons, half of which will then revert back to the state’s General Fund on deposit at Gringott’s. Cutting off the 348 retired state legislators who are currently being covered by health care for life would, then, save the state $20.17 million dollars every year, according to McCleary’s wizard math currently being used by the Republicans in support of Agema’s bill in the state legislature.

Read the Michigan press, and the go-to talking heads reporters and editors count on for pithy quotes, and the discussion is whether Snyder should sign the bill, not about the obvious fudging of the numbers to make it appear as though cutting off 138 people is going to save the $8 million dollars. Not a single mainstream media outlet in Michigan has picked up on the discrepancy in the calculated savings associated with the Agrema bill, and the real costs revealed in the analysis provided with the Johnson bill. Then again, perhaps there was number fudging when Johnson’s bill was “analyzed,” making it appear that $5.3 million to keep the Retired Legislator Club members in Viagra was, well, a trifle in the grand scheme of Michigan’s multi-billion dollar budget.

Michigan could, of course, join Wyoming and provide no health care to legislators either current or retired.

This excellent September 2011 USA Today investigative piece compares pension benefits, salaries and other information for legislators nationwide. Michigan legislators collect huge paychecks and benefits in comparison to colleagues who sit in their respective legislatures full-time in states such as New Jersey and Wisconsin.

Again, according to research by the NCSL, as of December 2010, “At least 22 states (plus D.C.) have “a law, policy, court decision or union contract that provide state employees with domestic partner benefits.” Normally health care is covered within the term ‘benefits.'”

Governor Snyder’s spokesperson Sara Wurfel said Snyder will “sign Agema’s bill preventing public employers from offering health-care benefits to domestic partners – but only if he’s sure university employees are excluded from the ban.” Snyder has until December 27, 2011 to sign or veto the bill.