Granholm proposes retirement plan for some state, public school workers aimed at cutting costs

Granholm proposes retirement plan to cut costs

LANSING, Mich. — Michigan Gov. Jennifer Granholm proposed a broad plan on Friday to cut government costs, including a proposal she hopes will coax thousands of eligible state employees and public school employees into retirement.

Granholm also wants to create a health care plan that would cost many state workers more. She also would eliminate lifetime health care benefits for state legislators and prompt local school districts to do more to share services in an effort to save taxpayer money.

The proposals are among the Democratic governor’s priorities for her final year in office. Granholm can’t run for governor again because of Michigan’s term limits law.

“Government can’t be all things to all people,” Granholm said in a speech to the Lansing Rotary Club. “We have to focus on the things that matter most.”

Michigan faces a budget deficit of at least $1.6 billion for the fiscal year starting Oct. 1. Granholm estimated that combined, her proposals could save around $450 million in their first year.

Roughly 7,000 state employees and 39,000 teachers and other public school employees already are eligible for retirement. Granholm’s plan would increase benefits for those retiring during a specified time period. Employee contributions to retirement systems or other benefits costs could be boosted for state employees who stay on the job.

Granholm proposes replacing two of every three state workers leaving under the program.

Her ideas appear to have some common ground with proposals already pitched by both Republicans and Democrats in the Michigan Legislature. But there also key differences.

A plan backed by Republican Sen. Majority Leader Mike Bishop, for example, calls for many public employees to take a 5 percent pay cut later this year and remain at that level for the next three years.

“The bottom line is we can’t afford to run government like we’ve been running it,” said Gary Olson, director of the nonpartisan Senate Fiscal Agency.

Granholm will detail more proposals during her State of the State speech next week and her budget proposal in February.