Michigan's shrinking government

State employees taking a harder hit than private sector

Ron French / The Detroit News

Lansing -- State government isn't what it used to be.

In fact, it's about 80 percent of what it was at the beginning of this decade. And it's going to get smaller.

Michigan's eight-year recession has slashed one in six state workers and one in five state government dollars. Since 2000, the state has shed the equivalent of three auto assembly plants worth of workers -- a busload of employees taking their personal belongings and their last paychecks home every two weeks.

Just how much deeper those cuts will go is at the core of the budget battle in Lansing. With the final budget bills on the governor's desk awaiting her signature, Republicans and Democrats are squabbling over how to spend their shrinking pot of money. Both sides agree on one thing: more cuts are coming.

Those cuts will be made to departments that, in some cases, have lost more than a third of their workers this decade.

With the auto industry in free-fall and an unemployment rate that leads the nation, the size of Michigan's state government has become a target for complaints, said Craig Thiel of the Citizens Research Council of Michigan.

"People are hammered all the time about Michigan losing jobs," Thiel said. "They look at the private sector and think it's time for the state government to take its hits."

At General Motors, for example, the U.S. work force has plummeted by 65 percent since 2000, from 212,000 to 73,500.

But a Detroit News analysis of data indicates that, in some instances, state employees have been hit as hard or harder than private sector workers.

The state's nonfarm work force is down 11 percent since 2000, while the group that makes up the majority of employees who get a check signed by the state of Michigan is down about 15 percent, according to Civil Service Commission reports. For example:

• The Department of Natural Resources has 38 percent fewer employees than in 2000. There are only 83 DNR fire officers, who are the first responders to fires on public lands, patrolling the state north of Clare, despite a state-commissioned report that pegged the optimal number at 120. "It's lucky we didn't have two major fires at the same time this season, or we would have had major problems," DNR spokeswoman Mary Dettloff said.

• The Department of Human Services has lost more than 3,600 employees since 2000, from clerical staff to caseworkers, while the need for services has soared. Just in the past year, the number of DHS clients has jumped more than 20 percent, to 2.2 million.

• Corrections lost 2,300 workers since 2000, primarily through prison closings.

• One in four Department of Agriculture employees is gone since the beginning of the decade. The migrant labor housing inspection program has been cut in half. All the department's regional offices are closing this fall. The economic development staff has been slashed.

"If someone is urging the downsizing of state government, consider it wildly successful," said Gary Olson, director of the Senate Fiscal Agency.

State spending more

Not everyone agrees. In a policy brief written for the Mackinac Center for Public Policy, a free-market think tank based in Midland, Gary Wolfram, a Hillsdale College professor of economics and public policy, argues that state government has grown during the recession.

"There are lots of ways to grow without adding employees," Wolfram told The News. "It (state government) is clearly larger. It's spending billions more."

Total spending from state resources is up 7 percent -- $1.8 billion more in the 2008-09 budget year than in 2001. That's the equivalent of an additional $618,000 being spent every day since the recession began.

But those figures don't take into account inflation. While the state's total spending over the eight years increased 7 percent (reaching $27.5 billion in '08-'09), inflation during the same period was triple that (21.7 percent).

When adjusted for inflation, total spending has decreased 14 percent. Spending from the general fund, the Legislature's main source of discretionary money, is down 21 percent. By comparison, Ohio's general fund was down less than 2 percent, and Indiana's increased 5 percent.

Wolfram also argues total state employment is down only slightly. He cites statistics compiled by the U.S. Bureau of Labor Statistics that lump in state university and some hospital workers as state employees.

State university employment, for example, has jumped 8 percent since 2000, paralleling a 7 percent increase in enrollment.

But labeling a Michigan State University professor a state employee isn't completely fair, MSU economics Professor Charles Ballard said. Only 31 percent of MSU's budget comes from the state; the share was 52 percent in 2000.

There was one state employee for every 161 Michigan residents in 2001; by the end of 2008, it was one state employee for every 197 residents.

"A lot of departments, we're seeing people do a lot more duties, from agriculture to transportation," said Scott Dianda, president of the Michigan State Employees Association.

For example, there are fewer Michigan Department of Transportation employees to clear roads in the winter. "It's the same number of miles of roads and same amount of snow," Dianda said. "We have to clear it with fewer people."

How big is government?

Just how big state government is depends on which side of the aisle you sit in the House of Representatives and the Senate.

"Republicans generally see an oversized government and Democrats see an undersized government," said Rep. Tim Bledsoe, D-Grosse Pointe. "Each side will draw upon the figures to buttress their perspective."

In one sign of how gloomy the budget has become, most Democrats and Republicans share the same view of the future: "It's going to be grim," Bledsoe said. "The bottom line is, we as a state are losing jobs, losing population; we have a shrinking economy. We're going to have to shrink state government."

Sen. Alan Sanborn, R-Richmond, concurred: "The money is simply not there. With shrinking government revenues, it only makes sense that government would shrink."

Sanborn suggests the state may have to cut school aid more. School aid dropped less than 3 percent in the school aid budget signed by Gov. Jennifer Granholm, while aid to cities in the form of revenue sharing dropped more than 12 percent.

Wolfram recommends Michigan stop incarcerating drug users, convert Medicaid into health savings accounts and eliminate the cap on charter schools.

"Until you address those problems, you'll get more spending and less output," Wolfram said.

Bledsoe believes a good place to start is the Corrections department. "We spend way over what other states spend," he said. "If we incarcerated at the same rate as Illinois, that's a billion dollars in savings there."

Cutting state services is tougher than cutting auto jobs because demand for government services doesn't go down during a recession, MSU's Ballard said.

"I understand the frustration of the man on the street," he said. "There are a lot of folks out there who think, let's cut government spending.

"But when you ask them about specific things, (such as) should we have child protective service investigators? Should we have someone to make sure the bridge doesn't fall down? Should we have police? Should we have services for battered women?

"A lot of the things the state government does have wide support."

rfrench@detnews.com (313) 222-2175