Recently at the annual Detroit Regional Chamber Policy Conference, I had the opportunity to speak to business men and women and lawmakers about how spending cuts and reforms, paired with new revenues and a new business tax structure, are critical parts of a long-term budget solution and to Michigan’s future.

I highlighted hundreds of millions of dollars in cuts that have already been made this year as well as a series of reforms that are underway – including elimination of a state department and consolidation of the state's human resources, purchasing, and accounting services. I also discussed additional areas where reforms can offer significant savings in the years ahead, including prisons, teacher pensions and health care costs, and public employee pensions.

In particular, we need to look at requiring school districts to competitively bid their health insurance and to pool with other districts and units of government in order to get the best possible price. I also support a number of common sense reforms in pension costs, such as eliminating the practice of "double dipping," which allows employees to receive a salary and a pension simultaneously, and tightening vesting requirements so that school districts do not provide lifetime health benefits to short-term employees.

While these and other pension and health care reforms will have little or no impact on the 2008 budget deficit, they are critical to controlling our costs over time, and they must be part of a budget agreement this year. We cannot balance our budget by destroying the things that make Michigan competitive. Our schools, colleges and universities, our health care system, and our 21st Century Jobs Fund are critical to our state's future, and our 2008 budget must reflect that fact.

A report on Michigan’s budget crisis by the bipartisan Emergency Financial Advisory Panel, released earlier this year, concluded that reforms must be combined with further spending cuts, new revenues, and a new business tax structure. I urged lawmakers to take the report into consideration.

> Emergency Financial Advisory Panel Report