News Story

U-M President Praised as 'Rock Star' for Cutting Costs, Real Numbers Tell a Different Story

University's overall budget has increased 44 percent

In a column in which he referred to University of Michigan President Mary Sue Coleman as a "rock star," Center For Michigan founder Phil Power said U-M has cut its general fund budget.

Power, a former Democrat U-M regent, wrote, "Year by year for more than a decade, the university has been gradually, remorselessly tightening its belt. Over the period, the U of M has taken $235 million in costs out of its general fund budget by reducing expenditures between 1.5 percent and 2.25 percent per year."

Technically, the university may have chipped away expenses worth $235 million in some areas. However, under Coleman’s guidance spending increases in other areas have more than made up for those savings, with the U-M general fund budget and spending rising 44 percent, from $1.1 billion in Coleman’s first year in 2002-03 to $1.58 billion budgeted in 2011-12.

Power didn’t respond to an email seeking comment on his claim.

Charles Owens, Michigan president of the National Federation of Independent Business, said he has seen Michigan’s public schools say they have cut their budget despite an overall increase in spending.

"We've seen the same kinds of claims by public schools and lawmakers that are looking for justifications to increase taxes to sustain spending levels," Owens said. "A reduction in a net increase is not a budget cut. It's math that doesn't work in the real world."

Mackinac Center Education Policy Director Michael Van Beek has compared such budgeting practices to a family that cuts its cable bill from $100 to $50 a month and then buys a $1,000 plasma screen TV and claims to have reduced their home entertainment budget by $50. By those accounting practices, Van Beek says even the simplest reductions mean budget cuts no matter how much overall spending increases.

U-M has made significant savings in employees' benefits under Coleman. U-M says it has saved $400 million in employees' benefits costs since 2003. But U-M has spent more in other areas, such as faculty compensation, which rose from $122,943 on average per full-time job in 2005-06 to $141,763 in 2009-10, according to a House Fiscal Agency Report.

U-M says that one-third of all faculty salaries are paid for outside of the general fund by donor gifts, endowment proceeds and research grants, which saves taxpayer dollars.

"Universities spend money hand over fist every year and the University of Michigan is no different," said James Hohman, a fiscal policy analyst for the Mackinac Center. "They may have reduced some of their expenditures. But they are spending more in other areas, year after year."

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

Proposal To Keep Forced Unionization Intact – It’s All About The Money

The Service Employees International Union would get millions in cash, but the people it "represents" wouldn't get state employee benefits if a constitutional amendment the union is pushing is passed by voters in November.

That's the ugly truth for tens of thousands of people who have been roped into becoming members of the SEIU thanks to the union's "home health care dues skim," which has netted more than $31 million for the union.

Language in the ballot proposal promoted by the union to keep the scheme going paints a clear picture of what it’s all about — getting dues money from vulnerable disabled Michigan residents who are participants in the Home Help Program while excluding the workers it is supposed to represent from getting the same benefits state employees enjoy.

Rep. Greg MacMaster, R-Kewadin, vice chair of the House Appropriations Human Services Subcommittee, said the SEIU has been exploiting the Home Help Program participants and now it's trying to exploit the state constitution.

"I'm flatly against this proposal," Rep. MacMaster said. "No one should be trying to benefit from other people's poor health and that's what they (the union) have been doing. Nobody — businesses or unions — should be using the constitution for their own financial gain, and now that's what they are trying to do."

The Home Help Program gives elderly patients and others suffering from various ailments the option to be cared for at home instead of in institutions, such as nursing homes. It has been estimated that 75 percent of caregivers in the program are relatives or friends of the patients.

Language in the proposal would assure that those working in the Home Help Program will remain unionized with a newly created Michigan Quality Home Care Council posing as their employer. Those union members are only treated as if they were public employees for payroll and dues deductions purposes. In virtually every other way they are not treated as public employees.

The key wording from the proposal that would help guarantee continuation of the unionization helps explain the union's true motives:

" ... participant-employed providers governed by this section shall have the rights relating to collective bargaining with the Council as are otherwise provided by law to public employees not within the classified civil service relating to their public employees, and the Council shall be governed by such collective bargaining arrangements, to be enforced by the appropriate labor relations agency”

The proposal's language then specifies that the participants aren't entitled to any other benefits:

"But such providers shall not, as a consequence of this section, be considered public or State employees for any other purpose, nor be entitled to any other benefit reserved to such employees."

In other words, what the so-called “employees” get out of the constitutional amendment would be having dues taken out of their checks and collective-bargaining representation.

"The legislature has spoken on this and the attorney general has spoken on it as well," said Vincent Vernuccio, director of labor policy for the Mackinac Center for Public Policy. "I think when the voters have their chance to speak they will reject it as well. These are people who take care of their sick relatives. They have no need for a union. The union is just exploiting needy people."

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.