FOR IMMEDIATE RELEASE: Monday, May 23, 2011
CONTACT: Leigh Fifelski, (517) 999-3646 or (248) 321-4579

LANSING – As legislators prepare to pass Michigan’s FY2011-2012 budget, state employees are pointing lawmakers toward innovative cost-savings, efficiency, and accountability solutions that could save tens of millions in taxpayer dollars in this fiscal year and beyond.

State employees’ New Solutions for Michigan report analyzes newly accessible data and takes an under-the-hood look at ways to streamline the operation of state agencies based on the insight and experience of public employees who provide essential services day in and day out. The report represents another effort by state employees to propose reforms to the governor and legislature that can help save taxpayer dollars and protect essential services.  

Recommendations show how Michigan could save upwards of $185 million in FY2011-12 alone by:

  • Prioritizing frontline service delivery and reducing managers
  • Pursuing better value from contractors, consultants and agency staff
  • Delivering better services through collaboration between agency leaders and frontline employees.

New Solutions for Michigan reveals that the state classified workforce averages fewer than six non supervisory staff for every manager and/or supervisor (5.87:1) – well above other states’ norms. In some agencies, the staff-manager ratio is even smaller: less than one manager per staffer at the Attorney General’s Office and about four managers per staffer at the Department of State.

“Just like Michigan families, our state must stretch every dollar and spend it where it’s needed,” said Phil Patrick, a 32-year employee with the Unemployment Insurance Agency and Divisional Vice President of SEIU Local 517M. “Lansing must make sure that our agencies are lean and resources are focused on frontline services.”

Michigan’s workforce is more than twice as top heavy as Texas, which won bipartisan support for legislation that set a minimum ratio of 11 staffers for every manager. Today, Texas has 14 state government staffers for every manager. Last year Iowa lawmakers established a ratio of 14 employees for every manager with a goal of a 20:1 ratio by 2016. Oregon’s legislature is considering action toward an 11:1 target in its current session.

Increasing Michigan’s ratio by just one staff per manager would yield a savings of $75 million annually in wages alone. Moving the state toward an 11:1 target in the long term could save hundreds of millions in annual spending and protect essential services.

New Solutions for Michigan also uses data newly available on the Michigan Transparency website to shed new light on contracting costs, which amount to 26 cents for every $1 of state spending, compared to 10 cents for state employee salary and benefits. The state spends two-and-a-half times more on contractors than its own workforce and has committed billions of dollars in long-term contracts with out-of-state firms.

“This is the first detailed look at the enormous opportunities for reforming the state’s contract system,” said Frank Houston, campaign director for A Better Michigan Future, a coalition of 48 organizations. “State employees are shining a spotlight on the problem and offering serious solutions. We urge Governor Snyder and the legislature to scrutinize state contracts and provide more sunlight and accountability for taxpayers.”

The state spends $1.1 billion on contracts annually, without counting community health and higher education. A 10 percent cut in those costs would save Michigan $110 million annually.
“When we’re cutting schools, police, and other services, Michigan also should be asking vendors to pare down their profits to do their part,” said Dave Baker, a Youth Specialist at DHS’s Maxey Training School and President of AFSCME Local 1327.

New Solutions for Michigan recommends that the state perform a comprehensive cost/benefit analysis of contracts, as required in the Public Service Accountability Act, to ensure agencies are providing services in the most cost-effective manner possible.

The report also exposes a weakness of Michigan’s generally useful transparency website – many contracts are difficult to find. For example, the Department of Transportation contracts available online include none related to design, inspection, and other professional services contracts. DOT staff report that the agency typically requests large, up-front sums for engineering services and then engages individual contractors directly, bypassing the official process for review.

“As a state employee, I see firsthand the real opportunities for reform,” said Gina Nelson, an eligibility specialist with the Department of Human Services and a member of UAW. “Michigan citizens have made tough sacrifices, state employees have made tough sacrifices, and now it’s time to take a deeper look at how our agencies operate to make sure we’re delivering quality services in the most cost-effective way possible.”

These recommendations are endorsed by SEIU Local 517M, UAW, AFSCME Council 25, and MSEA, which together represent 32,000 employees in agencies across the state. New Solutions for Michigan originated with a survey and meetings among SEIU Local 517M members to identify ideas for increasing efficiency, cutting costs, and improving the quality of state services. Union researchers analyzed transparency data as well as information provided by state agencies, frontline workers, leaders, and staff in preparing the report.

The report can be found at:
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