Michigan taxpayers losing control of state services

Too much money for too little service

Gov. Snyder needs to rethink his strategy when it comes to providing services to Michigan residents. The state often pays contractors more money to do exactly the same work as public service workers.

What’s more, out-of-state contractors have billed the state for over $10 million for services that used to be provided by Michigan public service workers. That’s money that should stay in the state and benefit Michigan’s economy through jobs and tax revenue.

“Our state, and the jobs that keep it going is slowly being sold off to private companies,” says SEIU 517M member George Heath, who works at the Department of Transportation. “Gov. Snyder has been cutting the number of qualified state workers only to turn around and hire contractors to the same jobs at a higher cost to taxpayers.”

Heath points to the Pure Michigan Waste report just released by the Coalition of State Employee Unions to back up his claims. The report shows how private, for-profit contractors are costing taxpayers more. In just one example, the Department of Transportation’s I-275 bridge repair project, the state is paying contract project managers $53.55 an hour compared to $39.44 an hour for state project managers. Even after taking into account the fully-loaded cost of a state employee’s health care and retirement benefits, the cost to taxpayers is still less than with the contractor – $111.16 for state worker v. $162.92 for a contract worker.

The report also reveals that just 10 percent of the state’s budget goes to state employees’ total compensation, while 26 percent is spent on private contractors.

“We need to get away from the knee-jerk idea that private companies can do a better job of providing services than state employees can,” Heath said. “When you step back and really look at what’s going on, you find out we’re not saving the taxpayers money. We’re wasting it.”

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