LANSING – A coalition of five business-related organizations have jointly called on Michigan to make major budget reforms in the 2009-10 fiscal year that they say could save the state’s coffers as much as $1.5 billion.

“Michigan needs a comprehensive, long-range plan to put the state on a fiscally responsible track. It’s going to take a lot of courage on the part of our elected officials, but reforms are necessary for a strong economic base and a strategic public sector in Michigan,” Phil Power, president of the Center for Michigan, said in a release.

Along with the Center for Michigan, the statement and call was also issued by the Detroit Regional Chamber, Detroit Renaissance, Michigan Chamber of Commerce and Grand Rapids Area Chamber of Commerce.

Included in the spending reforms the groups proposed was an estimated $780 million from the Department of Corrections ($400 million by having the state imprison offenders for the same average as surrounding states and $380 million in management changes and efficiencies in the department). The proposal was issued the same day as the Council of State Governments issued its report on proposed state savings for the department.

The proposal also called for saving $269 million by reducing state worker health benefits so they match the national averages, save an estimated $231 million by dealing with undocumented and potentially fraudulent child care payments, another $230 million through graded premiums for school employee health care vesting and $100 million from unspecified Medicaid coverage restrictions.

The proposals also include $25 million in savings by freezing state worker pay, and another $60 million in eliminating the Michigan Tuition Grant scholarship (which Governor Jennifer Granholm has several times unsuccessfully attempted to do).

Also included is a total of $5.3 million in cutting judicial pay by 5 percent and cutting their health benefits. The proposals also call for $620,000 in savings through a 5 percent pay cut for the governor, other state officers and the Legislature.

Tied to no specific savings, the coalition also called for the state to share regional service sharing, to eliminate the eligible buy-in for school employees’ retiree health benefits and to repeal binding arbitration for public safety workers.

“We are offering the governor and legislators a road map to fix Michigan’s deteriorating budget situation. We hope they understand the urgency of the situation and seriously consider the reform ideas offered as a means to restore some sanity to our budget process,” said Richard Studley, president of the Michigan Chamber of Commerce.

State fiscal officials have estimated the state could see a general fund deficit of at least $1.3 billion in the 2009-10 fiscal year. There are hopes the problem could be ameliorated in part through a federal stimulus package backed by President Barack Obama and working its way through Congress.

But the business coalition rejected using a federal stimulus, charging it would only delay the inevitable decisions that would have to be made to restructure the budget.

A state budget spokesperson could not be reached for comment on the proposal.

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