Republicans in the Michigan House on Monday called for a 5 percent pay cut for state employees and a 5 percent cut to state departments to help address a growing deficit in this year's budget.

GOP leaders said state government is spending $5 million more each business day than is being collected in tax revenue. A plan proposed Monday would cut salaries 5 percent for 52,000 state workers, make state employees and retirees pay higher health care premiums, and reduce spending by 5 percent across the board in state departments.

"It is time to bring state government in line with the economic realities of the private sector," said House Minority Leader Kevin Elsenheimer, R-Kewadin.

Many state employees are in labor unions, so their contracts would have to be renegotiated with Democratic Gov. Jennifer Granholm's administration. Granholm, who has called for unspecified state employee concessions in the next budget year, did not seem receptive to cutting their pay 5 percent this fiscal year or next.

"State employees have made concessions. They're taking home less this year than last," spokeswoman Liz Boyd said. "They're paying more for their health care."

State workers got no pay raise this fiscal year but got one last year. They are scheduled for a 1 percent raise in October and a 3 percent raise in October 2010. Boyd said the Granholm administration has had informal talks with labor unions about concessions.

While the GOP said it would seek a 5 percent reduction in legislative office allotments and the salaries of legislative employees, no House members — either Democrat or Republican — are voluntarily giving back some of their pay to the state treasury. Granholm has been doing so, but Elsenheimer spokesman Bill Nowling said Elsenheimer gives some of his salary to charity.

Nowling said it is procedurally difficult to return pay to the treasury.

State legislators who serve six years also get lifetime health care when they reach age 55.

Republicans, who said the 2009 and 2010 pay raises should be frozen, said there must be more urgency in dealing with a shortfall that could reach $1 billion in the budget year that started in October if revenues continue coming in $100 million a month less than anticipated. The state also is facing a potential $1.4 billion deficit in the next budget year.

Granholm plans to use $313 million of federal stimulus money to balance this year's budget.

The GOP, which is in the minority in the House, also said economists and other experts should gather immediately instead of in May to give revenue estimates. Boyd said it would be better to wait until May, after there is a better idea of business taxes paid in April.

"We're very aware of the revenue picture and it is concerning," Boyd said.

Republicans who control the Senate have approved more than $2 billion worth of tax cuts and credits this year but have not proposed a way to offset the revenue losses with spending cuts, drawing criticism from Democrats who say the GOP is trying to make the budget situation even worse.

Senate Republicans may start proposing cuts this week, though, when the Senate Appropriations Committee starts approving department budgets for the fiscal year that starts Oct. 1.

For the full article, see David Eggert, "GOP proposes 5% pay cut for Michigan state workers", MLive, March 23, 2009.