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Government Welfare: Are Government Pensions and Salaries Breaking the System? By Robert E. Martin There was a time in this nation when government service was considered one of the more noble endeavors a person could embark upon. Rather than pursuing government service for monetary reasons, those that dedicated their energies to serving for an elected office did so out of a sense of pride and a desire to improve their community and country. In the State of Michigan and the City of Saginaw there is a lot of talk and rhetoric bandied about by elected officials and candidates running for office about the lack of money available for 'essential' government services. On the state level, there is the reality of the General Fund being depleted by tax cuts and a reduction of service. Indeed, locally with the discovery of dangerous dioxin levels saturating soils in specific areas of Midland and Saginaw, lawmakers and bureaucrats are telling residents that the Michigan Department of Environmental Quality does not have the money to conduct an independent study, and are thereby relying upon industry to fund it. Recently we had the introduction of yet another cigarette tax to help finance education and further build-up the state coffers, while locally in the City of Saginaw we are hearing debate about removing the Property Tax Cap. This, of course, is buttressed by threats from elected officials to further cut police and fire service in the city if voters fail to do so in November. But something that is rarely discussed in election cycles is the astronomical cost paid by taxpayers to the politicians that become our elected representatives, not to mention the pension plans that impact taxpayers once government employees reach retirement age. One undeniable fact that voters should think about in November is that Michigan has one of the most costly state legislatures in the country, with a legislative budget that is among the highest in the nation. During the past fiscal year, state legislators spent $106.4 million on themselves, their staffs, and operations such as the House and Senate fiscal agencies. In 1998, the most recent year for which comparative data is available, Michigan had the sixth highest legislative budget among the 50 states and tops the five states in the U.S. Census Bureau's Great Lakes region. The state of Illinois, in comparison, with 3 million more people and a general fund budget more than twice that of Michigan's, ranked a distant second among the top five, spending two-thirds of the $84 million Michigan spent. That amount jumped even further after the Senate in January of 2001 refused to act on an automatic pay raise. Legislative salaries increased 35.8 percent, making Michigan's lawmakers the highest paid behind California and New York. Add to this, if you will, the high cost for large staff. Michigan lawmakers rank seventh in the amount of staff afforded to each member. According to the National Conference of State Legislatures, Michigan legislators average nine full-time staff members each. It would be one thing to pay these costs if Lansing actually accomplished anything, but instead we routinely hear from the mouths of these well-heeled lawmakers that there isn't any money to finance schools, protect the environment, or provide affordable health care. Because of these realities, advocates of limited government argue that residents are not getting more for their money. Moreover, they feel our tax dollars are being misdirected into the pockets of lawmakers when they could go directly to reinvestment in the services and functions of government that lawmakers spend time cutting. Considering the list of accomplishments at the State level over the past two years, it is hard to disagree that with a part time legislature, the same amount of work could probably be accomplished with less money. Indeed, a comparison of last year's Senate operating budget to 1965's part-time Legislature shows there might be savings of about $23 million or more if the Legislature returned to part-time. For the House, it would be about $30.5 million. And these figures account for inflation. On the Local Level In the City of Saginaw, elected officials are threatening to reduce police and fire protection and recreation and housing code enforcement, while stopping contributions to the Japanese Tea House & Cultural Center and the Andersen Enrichment Center, if voters do not remove the $3.83 million revenue limit in the city's 23-year old tax freeze, hoping to generate an additional $1.3 million a year if they do so. But what about the 'Golden Goose' pension system that benefits city employees in remarkable ways while taxing our pocketbooks even further? In the City of Saginaw, five members sit on the Pension Board. When a city employee, regardless of level, is ready to retire, the last three years of his salary out of the past ten are taken into account and then bumped-up by a 'multiplier' of 2.8 times the years of service. This, by the way, does not take into account the 2.5 percent cost of living increase that all city retirees receive annually after receiving their pensions. Consequently, a Battalion Chief in the Fire Department with a salary of $55,000 per year could conceivably retire with an annual pension of $85,000. Moreover, when you factor in the time that police officers figure into their multiplier spent testifying on cases in the courtroom, sources indicate that police officers and department heads will conceivably be retiring with $82,000, $92,000 and $100,000 pensions. According to Saginaw city council members Andy Coulouris and Carol Cottrell, the issue of pensions has not yet arisen in any Committee-of-the-Whole Meetings, and Interim City Manager Bill Bailey, who happens to be one of the five members on the Pension Board, informed The Review that very shortly this topic will be brought before Council. Hopefully, this will be done before the November election deciding the fate of the Tax Cap. Government has no business threatening to cut services, nor asking citizens to shell out more of their hard earned dollars, unless all these financial issues are brought before the public to analyze in the clear light of day. Parting Thoughts The ideas and issues brought forth in this article only scratch the surface on the topic of the high cost of government. Areas we have failed to mention include the inordinate number of Township Boards, Commissions, and governmental units comprising the expanse of Saginaw County. Again, the question must be asked, is it necessary to have one unit of government for every 5,000 people, more than two dozen school districts, 17 police chiefs and fire departments scattered all over the terrain? And what of those politicians and government bureaucrats that 'double-dip' into pension systems, receiving more than one pension for whatever particular job they were hired, appointed, or elected to do at different points in their career? Especially in the wake of the Enron/Arthur Andersen financial scandal that decimated the pension funds of so many Americans and has wrought loss and ruin, contributing to inflation in so many areas of our economy, it is time for elected leaders to realize that they are neither immune nor isolated from the financial pain suffered by those 'average Americans' that pay their salaries to begin with. The purpose of government is service. Let us not forget this.
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