The state Senate and House passed legislation Wednesday that will save half a billion dollars in taxpayer money for the costs of public employee benefits, said bill sponsor Sen. Mark C. Jansen, R-Gaines Township.
Senate Bill 7 limits the amount a public employer can spend toward health care unless employees increase their contribution.
“Ordinary taxpayers suffering under one of the worst economies for the past 10 years have been paying to maintain public employees’ benefits,” Jansen said. “This legislation provides some much-needed relief and helps us stretch our tax dollars.”
The reform will save an estimated $500 million in benefit costs for school district, local government, and community college employees. The measure caps public employer contributions to employee health care costs at a fixed dollar amount, or it divides the costs so employees contribute 20 percent of the costs.
Jansen said the measure addresses long-term budget concerns and strengthens local governments and school districts.
“This change is long overdue,” Jansen said. “In addition to providing schools and local governments with the necessary tools to address the rising cost of benefits and keep education dollars in the classroom, it addresses an inequity in the system.”
Jansen pointed out that private-sector employees in the Midwest on average pay significantly more for their health care benefits than their public-sector counterparts: 21 percent for single coverage and 30 percent for family coverage for private employees, compared with only 10 percent and 15 percent respectively for those in the public sector.
The money saved by local units of government and school districts will stay within that entity, Jansen said.
“These funds could help pay for more local services or be used to hire more police officers,” he said. “Local school districts may be able to put more teachers in the classroom. This is the best benefit of all.”
Senate Bill 7 now heads to Gov. Rick Snyder for his signature.