Business Leaders for Michigan Urges Legislature to Reject Pay Adjustment for State Workers

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DETROIT, Mich., February 19, 2010 – Business Leaders for Michigan today called on the Legislature to reject the 3 percent pay raise for state workers scheduled for October 1, 2010.

“We commend the State Civil Service Commission for making the tough decision to rescind the scheduled 3 percent pay raise for non-exclusively represented state employees,” said Michael Jandernoa, first vice chair of Business Leaders for Michigan. “We are asking the legislature to do the same thing for all other state employees and we are encouraged that the Senate Republicans have already begun discussions on this issue.”

The Michigan constitution allows the legislature to reject pay increases for state employees with a two-thirds vote of each house within 60 days of the Governor’s budget presentation. That option expires on April 12, 2010.

Average annual total compensation for state employees in Michigan was almost $17,000 more than the average annual total compensation of private sector employees in Michigan in 2007, and it was also more than the national average for state employees.

The majority of the state’s employers have had to take tough actions to survive. Many Michigan residents are struggling to find employment and many are leaving the state in search of work. “At this time when our state’s revenues continue on a downward spiral and when government programs and services are being cut or eliminated in order to help balance the state’s budget, it is inappropriate for government workers to receive an increase in their pay,” said Doug Rothwell, president and CEO of Business Leaders for Michigan.

“We recognize that government employees work hard… as do employees in the private sector, many of whom have received no pay raises or experienced cuts during this weak economy,” said Jandernoa. “We understand that this pay adjustment was approved during prior labor negotiations but we believe that the current and forecasted financial condition of the state must be taken into consideration at this time.”

In a recent quarterly survey of 70 of Michigan’s most prominent executives, 89% believe Michigan’s economy will be the same or deteriorate over the next 6 months.

“Given the additional significant cuts that will be required in the state budget, we don’t believe it is in the state’s best interest to implement the scheduled pay increase at this time,” said Rothwell. “We encourage both parties in both chambers of the legislature to act within the allotted time frame to rescind the pay increase.”

About Business Leaders for Michigan

Business Leaders for Michigan (www.BusinessLeadersforMichigan.com) is a private, non-profit executive leadership organization dedicated to making Michigan a “Top Ten” state for job and economic growth. The organization is composed exclusively of the chairpersons, chief executives or most senior executives of Michigan’s largest companies and universities, which provide over 300,000 jobs in Michigan, generate over $1 Trillion in annual revenue and serve over 130,000 students. The organization’s work is defined by the Michigan Turnaround Plan, a holistic, fact-based strategy to get Michigan’s economy back on track. Visit www.michiganturnaroundplan.com for more information.

Michigan Turnaround Plan 5 Steps

The Michigan Turnaround Plan will position Michigan for long-term, sustained economic growth through five strategies:

1. Changing the way the state manages its finances

2. Right-sizing and enacting structural budget reforms

3. Getting Michigan competitive to attract and retain jobs

4. Making investments that create a great job environment

5. Accelerating job growth through innovation and entrepreneurship

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