Senate approves reform to public employee health costs

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LANSING, Mich.—The State Senate approved Senate Bill 7 on Wednesday.

This legislation will require public employees to either pay 20% of their healthcare premiums or 0% for healthcare plans that fall under hard caps of $15,000 per family, $11,000 for couples and $5,500 for individuals.

Currently, taxpayers in the private sector in the Midwest are responsible for an average of 21 percent of their health care benefits for single coverage and 30 percent for family coverage. The public employee share in the region is on average 10 percent of the cost of single coverage and 15 percent for families. This legislation will require that the amount that public sector employees contribute to their healthcare costs is commensurate with the amount contributed by private sector employees.

“For far too long, the only solutions to budget issues offered out of government have been to increase taxes or layoff personnel. The passage of SB7 demonstrates that there are government budget solutions that don’t increase our tax burden, eliminate jobs, or impair the services that we provide to our citizens,” said Colbeck, R-Canton. “This bill will enable local units of government such as school districts to direct more of their funding to service delivery. Compliance with the provisions of the bill in recent teacher contract negotiations has already resulted in the recall of 26 laid off teachers in one district alone”. Colbeck also noted that elected officials, including legislators, are covered under the bill.

This legislation is the latest in a series of bills designed to restore fiscal responsibility to government operations. Fitch Ratings recently upgraded the rating outlook for all bonds in the State of Michigan to Positive from Stable. In contrast, the federal government’s failure to balance the federal budget has resulted in a downgrade from AAA bond rating to AA+ bond rating by Standard & Poors. The higher the bond rating, the less interest that governments must pay towards their loans thereby stretching the taxpayer dollar.

Colbeck helped lead the passage of this legislation as vice chair of the Senate Reforms, Restructure and Reinvent committee.

The measure now goes to the governor to be signed.

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