LANSING – It is turning into an “upward climb” to get the Legislature to move on a proposal to encourage state workers to retire, Gov. Jennifer Granholm told reporters Tuesday, but winning approval of that proposal is preferable to cutting funding to schools.

Granholm rejected allegations from some Democratic House members that the proposal, which would encourage state workers with more than 30 years to retire and have new workers pay more for their retirement health care benefits, was anti-labor.

The proposal, which she first outlined in January to affect both state workers and public school employees, is the logical step for the state to take to provide controls in personnel costs, Granholm said.

The private sector has gone to a system where there are tiered systems with differing benefits for workers depending on their seniority, Granholm said.

And she called her proposal a “humane” way for new state workers to pay for those benefits.

The Legislature last month approved the retirement proposal for teachers and other school personnel, and as of Monday more than 17,000 teachers and school workers had indicated they would accept the offer to retire. School workers had to apply for the retirement by June 11, and state officials anticipate the number that will take the offer is fewer than the 27,000 they had hoped would accept the proposal.

But so far the House has not taken any action on the proposal to extend the retirement option to state employees (SB 1226 ), and Granholm’s 2010-11 budget proposal is predicated on the retirement proposals being enacted.

House Speaker Andy Dillon (D-Redford Twp) has not said when the House might begin work on the proposal, though he told reporters last week that he has been getting a number of emails from state workers asking for action on the proposal.

Granholm acknowledged it will be difficult to get the proposal enacted, but said it would be the “logical step” for the state to take to ease its budget difficulties.

“It’s a better solution than cutting schools” and other programs.

CORRECTIONS BUDGET: Asked about the anticipated overspending by the Department of Corrections (See Gongwer Michigan Report, June 14, 2010), Granholm said the problems could have been reduced if the Legislature had enacted the corrections reforms she has requested for years.

The proposals that would deal with how long some prisoners are held and which go to prisons have been held off because of concerns over safety, but Granholm told reporters they are in line with what other states do to incarcerate lawbreakers.

“These are very basic reforms,” she said, adding that “something has to give” in terms of corrections policy to help minimize spending issues.

The state notified the Legislature that the department has overspent its budget by some $46 million, with some of that overspending coming from costs for more prisoners that were unanticipated.

S.A.F.: Granholm repeated her offer to use monies from the School Aid Fund to help offset the state budget deficit, but repeated her call that in doing so there could not be any cuts in education.

And she added to that, compared to a statement she made last week, that that provision would have to ensure there are no cuts to higher education. School Aid Fund monies can only be used for education purposes, which means they could be used for the state’s four-year universities and community colleges. Doing that would reduce the need for general funds to cover those budgets.

But Granholm said the Senate version of the higher education budget calls for cuts, which will mean higher tuitions that would hurt the number of residents that could attend college. If the state is going to meet its goal of doubling the number of individuals who have attended college, then funds need to be restored to higher education funding.

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