Snyder lays out ideas on streamlining gov't

By Kathy Barks Hoffman Associated Press GRAND RAPIDS (AP) -- Michigan Gov. Rick Snyder unveiled a plan Monday to use hundreds of millions of tax dollars to reward local governments that heed his call to cut spending and consolidate public services at the expense of those that don't. Snyder's plan would replace part of Michigan's tax revenue sharing program that supports local governments, which is expected to have about $200 million to give out when the new budget year starts Oct. 1. Communities that meet what Snyder deems the "best practices" standards would be eligible for incentives, although all would see cuts averaging 30 percent or more under his proposal to reduce money for local governments by nearly $100 million to balance the budget. "It is possible someone will get nothing" if they don't meet the new requirements, Snyder told local officials and the media as he unveiled his plan at Grand Rapids City Hall. "That's more their choice not to participate." Local governments still will share in nearly $660 million that the state constitution requires be given to them. That money is allocated by formula, and the governor and lawmakers have little control over that money. But Snyder is keen to make the thousands of county, city, town, village and township officials look for ways to combine services, erase boundaries and employ fewer people at less cost -- including themselves. "The goal here isn't to punish people," he said. "(But) let's get rid of the impediments we've had for far too long." The Michigan Municipal League said in a statement that many of its members already are making the kinds of changes Snyder wants, and welcome new legislation that would make it easier to streamline services. However, it opposes giving local governments less money. Protesters carrying signs outside city hall also objected to some of Snyder's proposals. Republican lawmakers who control the House and Senate were still studying the GOP governor's ideas Monday. "We need to look at it and we need to dig into more of the details," said Ari Adler, a spokesman for GOP House Speaker Jase Bolger of Marshall. "But the concept as a whole of encouraging best practices is promising." One of the major changes Snyder wants is for communities to place all new hires in a defined contribution retirement plan or a hybrid system that caps annual employer contributions at 10 percent of base salary. If health care is offered, Snyder wants new workers to pay 20 percent of their health insurance premiums. Changes wouldn't have to be made until new rounds of negotiations begin. "We're not asking anyone to open any contracts," Snyder said. The plan also calls for speeding up the collective bargaining process in cases where services or management are being merged between local units of government, so new contracts can be negotiated along with the merger. The current law has been an impediment because communities don't often see any immediate savings, since they often have to follow the contract that pays more. Snyder also suggests changing arbitration practices for police and firefighters so that a community's ability to pay is one of the first factors considered in an arbitrator's decision. Unlike some Republican lawmakers, the governor doesn't want to do away with binding arbitration entirely because it has helped avoid strikes by public safety workers. "We're suggesting reworking but not replacement" of the law, he said. For Detroit, the state's largest city, Snyder's budget proposal would mean a drop from $178 million this year to $119 million in the next budget year, a loss Democratic Mayor Dave Bing has said could have "potentially devastating consequences." Local governments have seen their property values plummet in recent years, and many are struggling to make ends meet. Detroit faces a $150 million shortfall. But Bing is on board with the governor -- a former businessman, like himself -- on many of the streamlining moves Snyder wants. And Grand Rapids Mayor George Heartwell, also a Democrat, said the stick Snyder is hanging over local governments' heads will come in handy when it comes to asking workers to make sacrifices and communities to consider merging. "This is the one moment, driven by the state's economic crisis -- a crisis that not only trickles, but rains down, floods down on cities -- this is the moment when we actually could accomplish something as bold as consolidation of governance," Heartwell said. Snyder also wants to end revenue sharing for the small local entities that get less than $6,000 a year. That would reduce the number of local governments getting revenue sharing through state law from more than 700 to around 400, although some may still get allotments required under the state constitution. Governments that agreed to share services -- counties and townships, for instance, or two cities -- would be able to tap a fund set up to help them coordinate police and fire radio systems and the other expenses that would come from combining forces. Snyder also would require that any new, costly requirements imposed by the state on local governments have no effect until the money is supplied to meet the new requirements. Local communities and school districts have complained that they're saddled with millions of dollars in unfunded mandates that sap their ability to provide services. Mirroring what he has already done in state government, Snyder wants local governments to produce a citizens' guide to the community's finances and a dashboard to measure performance by Oct. 1. Decisions on how much revenue sharing they'll receive will be based in part on whether they meet those requirements. The governor has promised to unveil similar ideas for local school districts next month. Published: Wed, Mar 23, 2011