Senate Republicans pass landmark state employee retirement reform
LANSING--The Michigan Senate today passed state employee retirement legislation that will save the state $81 million in 2011, said bill sponsor Sen. Mark C. Jansen.
Senate Bill 1226 is part of a strategy by Senate Republicans to balance the budget through cuts and reforms—without raising taxes.
“I’m pleased we have sent the governor significant reforms that address our state budget imbalance,” said Jansen, R-Gaines Township. “That we achieved this without raising taxes is a testament to the hard work of my legislative colleagues.”
Jansen’s measure includes a 1.6 multiplier for determining retirement amounts for employees currently eligible to retire and a 1.55 multiplier for employees with 30 years of service or whose years of service and age add up to 80. Current law is 1.5 percent.
All remaining state employees will contribute 3 percent of their salary to help cover retiree health care costs. This contribution is only for three years, but could be extended by the next governor and Legislature.
Jansen said the compromise will save the state’s General Fund $108 million over ten years, but Michigan could achieve significantly more savings if the sunset provision is eventually removed. He also said there will be no cuts to revenue sharing for local governments, police and fire because of the savings achieved in this retirement incentive legislation.
“Michigan families and job providers are demanding that lawmakers enact common-sense solutions to stop overspending and create a state government that is better, smaller, and more efficient,” Jansen said. “This is a step toward that end.”
Posted: Wednesday, September 29, 2010
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