Commentary

How to Save $500 Million on Michigan Schools

Michigan could save around $500 million if public school employees contributed the same percentage toward their employer-provided health insurance benefits as federal workers do, on average. The reform would generate savings of more than $300 per pupil.

According to figures from the Michigan Department of Education, in the 2008-2009 school year, school districts statewide spent $1.989 billion annually on employee health insurance. Also, the U.S. Office of Personnel Management reports that the average federal employee health insurance benefit plan requires a 27 percent employee contribution. Applying the same employee share to school employees comes to $537 million.

However, the potential savings figure must be adjusted downwards because some school employees already contribute to their coverage. But, MDE data show that 63 percent of the total state expense for school health benefits is for teachers, and teachers contribute nothing in more than 300 school districts according to a 2009 Mackinac Center survey. Noninstructional (and especially non-unionized) employees are more likely to pay for some of their health care costs.

On the other hand, if a 27 percent contribution were required from all school employees, it’s likely their demands for gold-plated coverage would be muted, resulting in greater savings. Based on the Center's 2009 survey, schools paid 44 percent more for family plan health insurance premiums on average than the private sector average of $10,341 in 2009. When school employees start bearing more of the burden, they would think twice before holding out at the bargaining table for the most costly coverage. 

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

Hiding the Evidence?

Michigan’s Department of Human Services considers home-based daycare workers to be state employees, and this means that the state can take union dues out of the subsidy checks used by parents to pay the daycare providers. But, an online daycare worker application mandated that applicants agree to the following condition: “I understand I am considered to be self employed and not an employee of DHS.”

And now, an application and another similar one have been removed from the DHS web site as the state is engaged with the Mackinac Center for Public Policy in a lawsuit over the matter. Patrick Wright, the director of the Mackinac Center Legal Foundation, wonders if the state isn’t trying to cover its tracks.

Michigan’s Office of the Attorney General, which represents the Department of Human Services in litigation, declined comment, citing the ongoing lawsuit.

Last week, the Mackinac Center Legal Foundation submitted an appeal to the Michigan Supreme Court to overturn the dismal of Loar vs. DHS by the Michigan Court of Appeals. Loar is the MCLF lawsuit against the DHS.

Wright said the state needs to explain how private business owners can become unionized public employees. There are at least 40,000 home-based business owners and more than $4 million in dues were collected.

The case has larger significance since a union lawyer has said in court that potentially any business that takes state subsidies could find its employees unionized. That could mean doctors that accepted Medicaid or landlords that take housing subsidies.

John West, an attorney representing the unions in the National Right to Work Legal Defense Foundation lawsuit, told a judge that any group that accepted state subsidies would be within the state’s authority if it had “added value” to the state or the public’s interest.

The DHS took down a second online application which stated that the parent was the daycare worker’s employer. This would mean that DHS was responsible for the employer’s share of any taxes.

Wright said that by taking down the applications, DHS has limited opportunities to apply for the program “while they try and clean this mess up.”

The Mackinac Center Legal Foundation originally filed suit in September, 2009. The Court of Appeals has dismissed the case twice, but never addressed the merits of the case, Wright said.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

Island Sinking Story Sunk

The Marshall Islands could sink beneath the waves because of rising sea levels, according to an Associated Press article that was picked up by national news organizations. The story reports that “waves threaten to cut one sliver of an island in two” and wonders what will happen to the 61,000 inhabitants while “for years global negotiations to act on climate change have dragged on, with little to show.”

But some national environmental experts question the validity of the story.

Pat Michaels, Senior Fellow in Environmental Studies at the Cato Institute:

This report is incorrect. Sea levels do not change uniformly around the globe. According to Cecile Cabanes, writing in Science, data from combined satellite and submarine observations going back to 1955 indicates that sea levels have FALLEN in the central Pacific Ocean by about four inches.  Given the mean projections for global warming from the United Nations Intergovernmental Panel on Climate Change (which are likely to be overestimates), Tuvalu will not even show a net rise in sea level (base year 1955) until around 2050.

William Happer, physicist and the Cyrus Fogg Brackett Professor of Physics at Princeton:

I think most of the news is part of a ploy to squeeze money out of Europe and America, aided by members of the climate-change cult there. Sea levels are rising at about the same rate as they have for the past 8,000 years or so, at 2 or 3 mm/year, with some interesting fluctuations. There has been no unusual change in rates. There was a much faster rise of sea level from the end of the last big ice age, about 18,000 years ago until about 8,000 years ago when most of the North American and Scandinavian ice sheets melted. That resulted in an impressive sea level rise of about 500 feet -- much faster than the current rate of rise.  Coral islands were able to grow fast enough to keep up with even these very fast rates of rises. I don't think the Marshall Islanders have anything to worry about.

Steven Hayward, Senior Fellow, Environment Studies at Pacific Research Institute:

Hard to know exactly what to make of the story of the sea level rise around the Marshalls without knowing whether subsidence is taking place in the local geological structure.  In many cases, "rising sea levels" is not actually a rise in the ocean, but a fall in the land.  This is true of several supposed island areas (such as Tuvalu), where sea level isn't rising--the islands are sinking.

And one of the oddities of sea level rise is that it is not rising uniformly around the world--this is a function also of geological movements of the continents.  But you need local geological data to know for sure, so I'm hesitant to declare on the Marshall Islands without knowing more specific information about the area.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.