Guards at county jails in Michigan would be covered by a binding arbitration process similar to that used in labor disputes involving police officers and firefighters under legislation passed by the Michigan House on June 26, 2008.

House Bill 6112 stipulates that when negotiations between a county government and union representing county jail guards reaches an impasse, either party may call for the creation of an arbitration panel made up of one county representative, one union representative and a neutral chairman selected from a list provided by the Michigan Employment Relations Commission. The basic procedures and criteria are essentially the same as those already established for police officers and firefighters under Public Act 312 of 1969.

Research by the Mackinac Center for Public Policy has shown that binding arbitration is a slow and costly process. Arbitration under PA 312 typically takes nearly 15 months to complete. A commission on local government finance appointed by Gov. Jennifer Granholm found that binding arbitration increased the cost of government by as much as 3 to 5 percent.

The arbitration process created by HB 6112 is different from the existing process for police and firefighters in one important respect. Under HB 6112 the process is all or nothing; the panel is presented with final offers of settlement by the county and the union, and must choose one or the other. This differs from the existing process of PA 312, which allows the arbitration panel to divide the dispute into separate issues and choose between the union and the municipality's offers on each issue or substitute its own proposals on non-economic matters.

Prior to passing the bill, the House rejected several amendments. One proposed to tie-bar HB 6112 to another bill that would change the process for all arbitration hearings, allowing arbitrators to create their own proposals rather than choose between the offers set before them by unions and local governments. Another would have adjusted the criteria to be used by arbitrators, such as expecting them to look at a longer time frame, consider the county's unfunded liabilities and stipulate that they could not base a decision on the county's ability to raise taxes or shift resources from other departments.

Needing 56 votes to pass the House of Representatives, HB 6112 received a majority when 54 Democrats were joined by 24 Republicans voting for final passage of the bill. Apposing the bill were 27 Republicans and two Democrats. The MichiganVotes.org vote tally is at right. The contact information for members of the House of Representatives is on page 11.

As of this writing, HB 6112 is still pending before the state Senate's Committee on Government Operations and Reform.

Paul Kersey is the Mackinac Center for Public Policy's director of
labor policy.
For additional information and an opportunity to comment on this issue, please see www.mackinac.org/9795.

Thomas Jefferson envisioned that the finances of government should be "as clear and intelligible as a merchant's books," allowing "any man of any mind" to "comprehend them, to investigate abuses and consequently to control them."

While the Information Age places such transparency within our grasp, a detailed expense report for Michigan government will not soon appear on the Internet for public inspection. With one exception: Last spring, Michigan Secretary of State Terri Lynn Land began placing a quarterly report of the Department of State's expenses online. Despite this example to guide them, the Office of the Governor has refused a request to replicate this report for other departments of state government, dismissing the idea as "cost prohibitive."

This request to the Office of the Governor was made by the Mackinac Center for Public Policy's "Show Michigan the Money" transparency project (www.mackinac.org/10694.) An identical and earlier request from the Center is what inspired the Secretary of State to begin posting her department's reports, and the MDOS has since provided a cost estimate for the project.

Cost for staff to initially create the first online expense report was $2,400. The "going forward" price to continue posting this report each quarter is just $700; or $2,800 annually. The MDOS also notes that these costs have been and will be entirely absorbed by assigning the task as a job priority for their existing employees. No additional staffing costs were or will be necessary.

The governor's office appears to be misunderstanding the modest nature of this request for information. Bearing in mind that the annual budget for all of state government is nearly $43 billion, it would appear that the comparative price to implement an MDOS-equivalent report for all departments would be far short of "prohibitive."

The fiscal 2008 budget for the MDOS was just short of $208 million, so figuring out how to produce that first report cost the department 0.0012 percent of its total budget. Now that they know how to do it, the cost for each subsequent quarterly report is just 0.00035 percent of the annual budget. Roughly applying these ratios to the entire $43 billion state budget would mean that the total cost of creating the first reports of this kind for every department would be $516,000. Thereafter, the total cost of quarterly reports for every department would be just $129,000 — or $602,000 annually to keep this whole transparency project running. 

These numbers are figuratively "pennies in the seat cushions" of the state budget. For example, one relatively new government program, the "21st Century Jobs Fund," cost taxpayers $65 million in 2008; and a brand new program designed to lure movie producers into Michigan carries an estimated 2009 price tag of $117 million. It would take less than one week of spending from just one of these new programs to start up and fully fund an online expense report project for every state department. The decision to "show Michigan the money" — or not — is a matter of priorities, not resources.

This ballpark figure will surely vary depending upon the specific details of each department's spending. But economies of scale could also drive down the estimate significantly: The Michigan Department of Information Technology should theoretically find it easier to replicate the procedure for each department now that MDOS has shown the way.

The MDOS has taken a modest but firm step in the right direction, placing online the names of vendors getting paid by the department, the reason for the expenditure and the amount. The report has its limitations, and falls short of the "gold standard" of transparency set by Missouri (a state Web site which, among other things, is updated daily and also provides the salary information for every state employee). While the Office of the Governor has stated that replicating Missouri would cost $100 million or more, they have yet to justify why replication of what the MDOS has already accomplished is beyond Michigan's reach.

A government that is spending money on everything from 20th Century Fox to 21st Century Jobs shouldn't have a 19th century standard for showing the taxpayers where it's all going.

Ken Braun is director of the Mackinac Center for Public Policy's Show Michigan the Money transparency project and the senior managing editor of Michigan Capitol Confidential.
For additional information and an opportunity to comment on this issue, please see www.mackinac.org/ 9795.