LANSING (AP) – Gov. Jennifer Granholm and union leaders representing thousands of state workers are working together to avoid layoffs Granholm said may be needed to deal with the large budget deficit.
Last month, Granholm said her proposed budget for the upcoming fiscal year probably won’t include any pay raises for state employees and could mean the loss of at least 2,000 state jobs.
The state faces a deficit of $1.7 billion in the fiscal year that starts Oct. 1 if spending levels remain the same. Granholm on Thursday will unveil her 2004 spending plan to a joint session of the House and Senate appropriations committees.
Rather than cutting jobs or taking away the scheduled pay raise to help with the deficit, union leaders want Granholm to state lower costs by reducing the number of private contracts for state services and returning those responsibilities to state workers.
“We’re looking closely to see if we can achieve any cost savings by reducing the amount of services provided by outside contractors,” David Fink, director of the contract-negotiating Office of the State Employer, said yesterday.
“Whenever possible, we want state services provided by state employees,” he added.
Michigan has about 55,000 state employees on the payroll after more than 7,000 left under last year’s early retirement plan. The loss of state employees has led to delays in issuing unemployment checks and liquor licenses, among other services.
The shrinkage in the number of state workers could make it difficult for those left to take on additional responsibilities. Many of those who left under early retirement last year haven’t been replaced.
State workers were to get a 3 percent pay hike on Oct. 1, but Granholm has said it’s unlikely the state can afford it. She has said layoffs are inevitable, but added that fewer people will be laid off if workers make pay concessions.
Fink has been holding formal talks with union leaders in recent weeks. “We’re exchanging ideas,” he said.
Among those ideas are policies last used by former Democratic Gov. James Blanchard to trim payroll costs in the 1980s.
The cost-saving measures include allowing state workers to take time off without pay while maintaining their health insurance benefits; or letting them take a voluntary leave of absence without pay.
The state also is looking into a plan that would let state workers work 80 hours, get paid for 72 and defer the rest, Fink said. The Internal Revenue Service has had a problem with the policy in the past, he added.
Alan Kilar of United Auto Workers Local 6000 said many of the 17,000 state workers represented by the union want options that allow them to work less without pay.
“Workers want to take the summer off with no pay and the ability to retain their benefits,” he said Monday. “There are different ways to save money other than laying people off.”
Kilar and John Deniston, president of the Michigan State Employees Association, said it’s important to give state workers the raise they negotiated.
“The pay raise is a drop in the bucket compared to the problem,” Deniston said. “I don’t think most of us object to helping, but we have to draw the line in the sand someplace.”