LANSING – State Representative David E. Rutledge (Ypsilanti) spoke out against a proposal passed by the House yesterday that would create a statewide mandate for public school districts, universities, community colleges, local units of government, and all other public employers, severely limiting the amount that public employers can contribute to employee health care costs.

“This legislation erodes local control, compromising the ability of employers and workers to negotiate contracts that fit their needs,” Rutledge said. “Particularly during times of economic instability, school districts, colleges, and other public employers should have the freedom to consider all options. This bill will limit those choices, eliminating any room for creative solutions or individual considerations.”

House Bill 4572 passed the House late in the day on Thursday, June 23, on a 58-51 vote. Similar legislation passed the Senate last month, which would mandate public employers to pay no more than 80 percent of employees’ health care costs. House Republicans have advocated for a hard dollar cap, which establishes fixed maximum employer contributions of $5,500 for single members, $11,000 for two-person coverage, and $15,000 for families. The legislation also prohibits the subject from being negotiated at the local level in
the future.

“I am deeply troubled by the implications of this bill,” Rutledge said, “particularly given the fact that a fixed dollar cap will be disproportionately harmful to lower-income workers.” Many public employers have developed creative systems for managing health care contribution decisions. For instance, the University of Michigan requires a higher percentage of health care contributions from employees with higher salaries. The version passed by the House this week would not allow a public employer to opt out of the requirement, even when the existing contribution structure is supported at the local level.

“State government should be enacting reforms to empower locals to do what makes sense for their communities and their employees,” Rutledge said. “This bill appears to be another attempt to thwart local control and compromise collective bargaining.”