Michigan Workers Get Ready for Budget Battle

It seems the whole nation has Badger fever these days, with rallies in Madison protesting Governor Scott Walker’s new budget plan swelling by the day to at least 80,000.  Many union workers are recognizing Walker’s budget as a coordinated attempt at busting public unions.

In Michigan, Governor Rick Snyder has somewhat similar proposals, although less extreme, in place in his budget proposal, while associated bills introduced into the Republican-controlled legislature would help to strip away worker’s bargaining rights, allow emergency financial managers appointed by Snyder to throw out union contracts, and levy steep taxes on middle class workers’ pensions.  Snyder has expressed concern that some of these bills could negatively impact his proposed budget and tax policies.

About 1,000 union members, including 500 construction workers, met at the Capitol Building yesterday to lobby against Snyder’s proposed budget and a handful of bills proposed that would affect workers.  Only 50 people were allowed into the house hearing room before security blockaded the doors. A planned “tea party” rally in support of Snyder’s proposed cuts yielded much smaller numbers, similar to the Madison protests where about 7,500 Walker supporters jostled amongst nearly 80,000 pro-worker protesters.  In Lansing tea partiers chanted in support of ending worker bargaining rights, while some said they did disagree with Snyder taxing their own pensions.

“We’re not against the concept, we’re just against the bill as it’s written today,” said Brent Gillette, the Michigan AFL-CIO’s Political Director.

“Today’s message was a friendly kind of education.  That’s the way we want to do business.  We hope that’s the way the rest of it will go.  We’re not a bit shy to start rallying our folks in a more aggressive way, if need be.  We hope the dialogue is open and the governor sits at the table and discusses issues important to working families.”

Gillette said Snyder’s concept of “shared sacrifice” is flawed and used an example of removing the earned income tax credit while giving companies tax breaks.

“They are going to give a tax break to big companies,” said Gillette.  “It’s kind of ironic that the amount they give away to companies is the same amount they are taking from the working poor.  He’s serving up an economic disaster.  There was nothing saying if you increased employment here or do something for workers you qualify for certain tax breaks, he was just doing that across the board.”

Representative Steve Lindberg, from Marquette, says he doesn’t believe cutting corporate and business taxes and reducing regulation means that businesses will flock to Michigan.

“I disagree with the basic premise that the Governor has kind of based his budget on,” said Lindberg.  “I don’t think there’s any guarantee that we’re going to create more jobs in Michigan if we lower taxes on business – that’s a fallacy.”

Part of Snyder’s budget plan calls for elimination of the Michigan Business Tax, to be replaced with a 6% corporate tax.  This change alone would create an estimated $1.8 billion strain on Michigan’s economy.  Snyder, much like Walker, plans to make up the difference with steeper taxes on middle class workers; cuts in K-12 and state university education; more than 30% less funding for counties, townships, and cities; and elimination of many tax credits for the poor.  However, Snyder also plans to cover some of the gap by eliminating other corporate tax credits.

“What will happen is if the unions are busted the gap between the poor and the rich will become wider, because there will be no middle class,” said Frank Mongene, Uniserv Director for the Michigan Educational Association’s Escanaba office.  “A lot depends on what happens in Wisconsin in the next couple of weeks.  If labor manages to win that battle I think things will get better for the working person.”

Mongene, a former school bus mechanic from Brimley says that about 50 school districts around the state “have no money” and some will have to “go bankrupt” or consolidate in order to survive.  Mongene says the state’s education fund actually had a surplus for this year that will be lost if Snyder transfers some of that funding over to community colleges.  The cuts in public school funding mean about $470 less for every K-12 student, per year.  The reality will mean larger class sizes run by fewer teachers making less money.

“Personally if I were a teacher I’d be looking at a different profession,” said Mongene.  “The only other alternative to closing the doors is wage and benefit concessions.  We’ve made so many concessions over the years that if I were a younger person going into the profession, I’d try to go into another profession.”

Mongene says he agrees with some of Snyder’s proposed cuts but unnecessarily cutting some already weakened services jeopardizes the state’s ability to educate its citizens and remain competitive.  With most high paying manufacturing jobs no longer available in the state, Mongene says the future of today’s students depends far more on a solid education than it did in the past.

“It’s important now that our children get an education.  I believe in paying a premium price for a premium product.  I don’t want someone making Wal-Mart wages teaching my children.”

According to Snyder’s press secretary, Sara Wurfel, cutting less than 5% out of the K-12 budget is pretty reasonable considering the serious budget shortfalls Michigan is facing.  Wurfel says that 53% of the state’s budget is already dedicated to education, which the Governor recognizes as a backbone to the state’s economic future.

Wurfel says Snyder hopes to get the budget bill passed by May 31 as the first part of his plan to “reinvent” Michigan and get it back on a track toward economic success.

“It’s not going to be easy, it’s not going to be fast,” said Wurfel.  “We’re stopping being in crisis mode.  We’re hitting the reset button and laying the foundation and investing in areas like education.”

Representative Lindberg recognizes that Snyder does have to make major budget cuts, including in law enforcement.  His concern is that “the Upper Peninsula doesn’t have to pay more than their fair share of the hits,” and is concerned about the fate of three state prisons in his district.

“Most people didn’t want a prison in their backyard,” said Lindberg.  “We took them in the U.P.; there was a lot of controversy, but now we have it.  I can make an argument for that.”

Stuart Skauge, from Negaunee and, like Frank Mongene, with the MEA, is in Green Bay helping organize rallies on the local level.  Skauge says the focus over the holiday weekend was in local districts, as many representatives were home for the holiday, but expects even bigger turnouts in Madison in coming days.

“This isn’t just a teacher problem, it’s all state public employees,” said Skauge.  “I think the opposition to that bill will grow every day.  It’s not about just raising taxes, it’s not about asking for concessions, it’s about breaking the unions.”

Skauge says the unions are more than willing to make concessions in today’s budget-strapped economy, but new proposals in Ohio, Wisconsin, Michigan and elsewhere around the country are taking things too far.

“It’s not a situation where they’re just asking for concessions, they’re taking our rights as unions away,” said Skauge.

“The problem in Michigan is that Governor Snyder is not being forthcoming with what he is trying to accomplish,” said Skauge.  “He’s trying to accomplish the same thing but come in through the back door.  He’s pushing the fight to the locals and he stays out of the limelight.”

Skauge thinks Snyder’s strategy is more subtle than Walker’s but would still accomplish the same goals, with supplemental bills now being introduced in the Michigan legislature allowing schools and other governmental entities to effectively make collective bargaining illegal by creating union-free “Right to Work” zones.  Because the Wisconsin battle has become so heated, Skauge thinks Snyder’s plan may face more resistance.

“Because Wisconsin’s situation is so publicized, once we let all our members know this is the same thing I think they’ll get the message.  I’ve never seen anybody try to take on all the unions in the public sector at one time.”

Snyder’s budget plan wouldn’t only affect public workers but also may lead to further cuts in police, firefighter and library services, park maintenance, road repair, and other local government services.

Since the 1920s the State of Michigan has collected taxes on behalf of local townships, counties and cities, called revenue sharing.  The Michigan Municipal League says that every year since 2000 the state has failed to disburse all of these funds, creating $4 billion in cuts to local municipalities.  Governor Snyder’s new plan calls for even deeper cuts, reducing local revenue sharing by a third, and disbursing funds based not on population but a municipality’s willingness to share services and make their own budget-cutting reforms.  Snyder’s plan would create a $200 million “pot of money,” separate from revenue tax money, that would help cover shortfalls for municipalities willing to share services and make their own budget cuts.

According to Marquette County’s Finance Manager Susan Vercoe, the county, which expects roughly $1.2 million in revenue sharing funds doesn’t yet have a plan to deal with an over 30% cut if Snyder’s budget plan is enacted.  County Administrator Steve Powers says the county will be amending the 2011 budget sometime next month and will begin working on the 2012 budget this summer.

“It’s [Snyder’s budget plan] certainly a hit; how manageable or unmanageable I don’t know yet.  Overall, in my opinion, it’s a manageable reduction,” said Powers.

Whatever the eventual outcome of the Michigan budget battle Sara Wurfel says Snyder has been careful to contrast his plan with current budget proposals in Wisconsin.

“The governor has been very clear that we’re heading down a different path,” said Wurfel.  “He wants to work collectively with employees and labor unions, through collective bargaining, where we all benefit.  The Governor is very interested in all input and dialogue in moving forward.”

This post was written by

Gabriel Caplett – who has written 106 posts on Headwaters - Community Journalism for the Great Lakes.

Gabriel Caplett is a writer and market farmer from the Upper Peninsula of Michigan.

Send an Email

Download Article as PDF