Update: Republicans hold hearings on containing public sector health care costs

Day 74: This is one in a series of posts assessing key developments during Gov. Rick Snyder's self-imposed 182 days to chart a new course for Michigan by July 1. For earlier posts go to mlive.com/stateofchange.

Speaking to thousands of union members from the steps of the Capitol, UAW President Bob King put Gov. Rick Snyder's budget and tax proposal in stark terms, asserting that it's designed to take money out of the pockets of those with low wages and fixed income in order to distribute it to "wealthy" business owners.

"This governor and this Republican Party want to take almost $2 billion more off of working people in Michigan and who does he want to give it to?" King yelled. "The wealthy, the corporations."

"And for this governor to want to steal from them to give it to the wealthy, is that wrong?" King asked. By eliminating the Michigan Earned Income Tax Credit, as Snyder's proposal does, "they want to increase taxes on people working every day, every week, the working poor in Michigan."

King called Snyder's efforts part of what he called a broad Republican "attack on the middle class."

Snyder's tax $1.7 billion tax cut proposal would be financed in part by imposing the state income tax on public and private pensions. King said pensioners are having a hard time surviving as it is. Replacing the Michigan Business Tax with a profits tax on corporations would exempt about 95,000 Michigan firms from paying business tax.

As the rally took a break, hundreds of union members marched through the Capitol hallways shouting "recall Rick."

While Snyder says he's opposed to right-to-work laws or getting rid of prevailing wage rules, unions complain that financial emergency legislation gives state-appointed fiscal managers broad powers to terminate labor agreements and other contracts, force service consolidation at the local level or even engineer the merger of whole communities.

Sen. John Pappageorge, R-Troy, said the legislation would encourage local governments and their unions to resolve financial issues before an emergency financial manager would be even needed.

"The idea was to put things in place that would make it less likely that a bankruptcy would occur," he said.

Snyder's budget seeks what could be $360 million in wage concessions from state employees with half the savings coming from requiring a minimum 20 percent employee contribution toward health insurance costs.

Senate Republicans began hearings Wednesday on a proposal that would apply that standard to local units of government, universities and local school districts. A Senate Fiscal Agency analysis said the measure would save $543 million.

Rick Hammel, D-Flushing Twp., said public employees have "given back hundreds of millions of dollars all over this state every time they've been asked. I would prefer that was negotiated as opposed to legislated."

Contact Peter Luke at (517) 487-8888 ext. 235 or e-mail him at pluke@boothmichigan.com.