In Michigan, the difference in benefits between state and local government workers and the average taxpayer who supports them is $5.8 billion per year, according to a new study.

If the state eliminated that discrepancy, the Michigan income tax could be cut in half and there still would be money left over.

Larger demands from pension funds and ever-increasing insurance premiums have been blamed for local government fiscal stress, but few citizens realize how big the gap truly is between private and public sector workers. And as compensation costs for government workers has increased much faster than the average taxpayers' has, money has been taken away from some of the things government is supposed to be doing.

The study from the Mackinac Center for Public Policy is important because the cost of benefits for public employees has skyrocketed to the point that they are squeezing the private sector and other government services. From 2000 to 2010, Michigan’s population fell 1 percent, K-12 enrollment dropped 6 percent, violent crime fell by 12 percent, property crime fell by 24 percent, and GDP and personal income increased by only 9 percent and 16 percent respectively. Inflation was 27 percent.

At the same time, private sector employment fell 17 percent (to 3.86 million jobs from 4.68 million jobs) while state and local government employment fell by about 7 percent. The average salary of public employees roughly kept pace with inflation.

But the costs of public benefits skyrocketed. Total spending in this area increased about 60 percent over the decade.

In Detroit and cities around the state, these costs have meant layoffs in police, fire departments, and less money for infrastructure.

"The more government spends on these benefits, the less it can spend providing services to Michigan residents," wrote James Hohman, a fiscal policy analyst at the Mackinac Center, and author of the study. "Benchmarking these costs to more closely resemble private sector averages would do much to free up cash to support government services and allow taxpayers to keep more of their own resources."

The study measures all government workers, from the state level down to local townships and schools and state workers at community colleges and state universities. The study only looks at the costs of benefits, which tend to be offered to employees on a more uniform basis than salary (for example, the CEO of a private company or department head of a government agency tend to get the same health insurance as everyone else).

Here are the areas and the estimated annual savings to the state by right-sizing the benefits:

Health insurance: $3.24 billion. The largest gap between the private and public-sector, by far. Private sector workers have health insurance plans with lower cost premiums and pay a higher percentage of them. The study notes that in 2011, the average family health plan cost school districts $17,692, while the average private sector plan cost businesses $10,988.

Retirement benefits: $1.46 billion. The state has consistently underfunded its pension plans, causing these costs to soar. A 1997 reform began transitioning state workers to a defined contribution plan, saving billions. The study recommends shifting school district and other employees to 401(k)-type plans, like state employees and the vast majority of those in the private sector.

Paid leave: $1.14 billion. Taxpayers provide public employees much more generous paid leave for vacation time, sick leave and other time off, costing over a billion dollars a year.

Government workers aren't better off in every area, however. The study found that private-sector workers receive more "nonproduction bonuses," which is payment for things like Christmas bonuses and company stock. The difference is an advantage of $84 million for the private sector employees.

Many of these extra benefits for government workers are set at the local level, and some recent reforms have taken place that aim to help benchmark these costs. But the study offers some more options:

• Continue and expand programs that give local governments the financial incentive to reduce the costs of their employees' benefits through additional revenue sharing.

• Mandate limits to the amount schools districts and local governments will pay for benefits. This is now done for health care costs. It could be done in other areas.

• Introduce a constitutional amendment to be put to voters, "which would mandate that state and local government employees not receive benefits that exceed certain private sector averages."

"Bringing benefits into balance will go a long way to fixing the government cost spiral, where governments spend more and more every year to provide the same services," Hohman said.

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A video about the study:

A Michigan Education Association union in the Upper Peninsula has listed the names of the school employees who left the union as part of the state's right-to-work law, leaving some to question whether the MEA is trying to create a hostile workplace environment.

The MEA 17-B/C union newsletter listed the name of 16 employees from four school districts in the U.P. who decided against paying dues or fees to the union and it also listed the services they no longer will get now that they're not part of the union.

Kathi Moreau, a counselor at Stephenson Area Public Schools, left the union and said she was shocked to see her name in the newsletter.

She said she opted out because of the cost and because she said she was never backed by her union — and never asked to be backed by the union.

"The fact that names were published in the newsletter confirmed the thought that some unions would throw their members under a bus at the blink of an eye," Moreau said in an email. "Additionally, there was no reason for publishing our names and is nothing less than a cheap shot for opting out."

James Perialas, president of the Roscommon Teachers Association, an independent union that voted to decertify from the MEA last year, said this was "an example of passive bullying."

"You would think that a professional teacher organization would not participate in this type of behavior," Perialas said. "These teachers were exercising their rights, and publishing their names implies that the readers should treat them differently in a negative way. Rather than ask them how they can win them back, they use bullying."

Wendy Day, a former Howell School Board Trustee who is running for state representative, agreed. "Holy cow, for all the anti-bullying efforts in our schools these days, this is shameful," she said.

Day said posting the names was akin to social bullying in schools because it was done to hurt reputations or relationships. There is a culture in the union to bully people who disagree with them, including school boards, business owners and teachers, Day said.

MEA President Steve Cook has repeatedly referred to employees who opt out of the MEA as "freeloaders."

The MEA spends the majority of dues money on the salaries and benefits of its centralized employees. According to its most recent federal filings, the union spends only 11 percent on "representational activities."

Cook and Jody Lynn Jaeger, 17 B/C UniServ Field Assistant, didn't respond to requests for comment.

State Sen. Rick Jones, R-Grand Ledge, said the targeted employees should have expected the union would publically list their names.

"I don't know if they are naming them as a traitor; I would expect that sort of activity to happen," Sen. Jones said. "It's not violent. If they did something illegal, something violent like damaging their car, that would be very inappropriate and should be punished. Just naming the people to the other members, I'm sure they all expected that to happen."

Joan Fabiano, founder of Grassroots in Michigan, said there was no need to list the union members who opted out.

"The obvious conclusion is to shame or do a bullying tactic or to put the fear of God in anyone else who might dare to exercise their freedom to choose," Fabiano said.

School administrators from the Menominee and Dickinson Iron school districts, which had 13 of the 16 targeted employees, didn't respond to requests for comment.

(Editor's note: This story has been updated with additional information from teachers since its original posting.)