By Kristen M. Daum
Michigan Department of Corrections officials have some explaining to do when they go before lawmakers this month for appropriations hearings.
The corrections budget for this fiscal year includes $10 million in savings, which officials planned to achieve by rehiring 250 retired corrections officers part time in order to reduce overtime costs.
The problem: It’s four months into the fiscal year and not a single retiree has been hired back — meaning the MDOC won’t come close to reaching the necessary savings.
Because of legislative delays and delays in rehiring officers, MDOC officials now project the plan will shave only $3 million off overtime costs.
That means that, beginning this week, MDOC officials will be in front of the Legislature explaining, among other budget issues, overtime costs that are spiraling out of control.
It’s a recurring theme. In the 2010-11 fiscal year, the last year for which totals were available, the department spent $50.6 million on overtime.
And from October 2011 through August 2012, state corrections officers worked 1.1 million hours of regular, non-holiday overtime, according to the House Fiscal Agency.
At the average corrections officer wage of $24 per hour, that equates to nearly $40 million in overtime.
The MDOC operates on an annual budget of more than $2 billion, in part, to oversee 43,000 inmates in the state’s prisons. About 13,500 people work for the MDOC, including 6,600 unionized corrections officers.
MDOC officials admit part of the solution to make up for the lost overtime cost savings will be asking lawmakers for more money.
“We can possibly absorb some of that (projected) savings, but certainly not all of that,” MDOC spokesman Russ Marlan said.
Lawmakers never expected the MDOC to see the full $10 million in savings because the legislation allowing the state to rehire retired corrections officers wasn’t passed until mid-December, more than two months after the state’s fiscal year began.
At the time, legislative finance analysts were still projecting at least $7.5 million in savings through the end of the fiscal year Sept. 30.
“Naturally, since it wasn’t passed until lame duck, it was unlikely we’d see more than nine months of savings,” said state Sen. John Proos, R-St. Joseph, who chairs the Senate appropriations subcommittee that oversees the Department of Corrections.
However, Proos said there was an expectation among lawmakers that corrections officials “were going to have to scramble to get this out the door” to fulfill the savings.
Because of MDOC’s pattern of overtime cost overruns, lawmakers have expressed concern about committing more money without evidence the department is truly making strides with the temporary solution that’s in place.
No new hires yet
It’s now been six weeks since Republican Gov. Rick Snyder signed Public Act 432, which took effect Dec. 21.
Because of hiring logistics, the MDOC doesn’t expect to have any retired officers back on the job until at least
Marlan said. Based on the intended $10 million in planned savings, every month of delays costs the state $833,300.
Marlan said last week that corrections officials were still developing a list of eligible former employees, with plans to contact them and make initial hires this month.
Marlan said he’s unsure how many retired officers might be on the job come March, but the pool of potential candidates is restricted by time and qualifications.
The earliest a corrections officer can retire is age 51. Their training is only valid for three years after retirement and, in some cases, the department is targeting specific skill sets to help reduce overtime in certain areas, Marlan said.
Marlan defended the MDOC against critics who say the department could have begun recruiting these qualified retirees months ago while the Legislature sorted out the policy.
“We were working on that but to be honest, we weren’t even sure that this was going to pass at all,” he said.
The law is intended as a temporary fix while new full-time officers are trained. But last year, there was resistance among some lawmakers to sign onto the plan because of the safety concerns involved with rehiring retired officers who might be out-of-step with procedures, training or, simply, the brotherly bond that’s shared among full-time officers.
It was for those reasons that the proposal lacked support from the Michigan Corrections Organization, which represents state corrections officers.
Making up the difference
Snyder delivers his fiscal year 2014 budget presentation to the Legislature on Thursday, spurring weeks of appropriations hearings at the Capitol.
While looking ahead to next year’s funding, senators and representatives will also look at current finances of all state departments, including MDOC.
Those review hearings begin this week, when a House appropriations committee hears from the MDOC ombudsman.
Rep. Greg MacMaster, R-Kewadin, who chairs the subcommittee, said corrections officials will face scrutiny, since the solution that was pitched and approved last year isn’t driving results.
“The weight and responsibility is going to be on the shoulder of the director; Dan Heyns, was the need truly there?” MacMaster said. “If they haven’t fulfilled the need yet, then the need wasn’t that great.”
MacMaster said he’ll have hearings with corrections officials throughout this month and he’ll want answers — especially if MDOC officials ask for more money, which, as Marlan said, is likely.
“If they’re asking for something, they’re going to have show results. Otherwise, we’re not going to appropriate again next year,” MacMaster said.
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A temporary fix for overtime
» The Michigan Department of Corrections has an overtime problem. From October 2011 through August 2012, state corrections officers worked 1.1 million hours of regular, non-holiday overtime. Almost half of those hours was worked to cover unfilled vacancies.
» Those vacancies stem from a 5 percent retirement rate among the department’s 13,500 employees, MDOC spokesman Russ Marlan said. The MDOC is working to reduce them by holding three training academies this year.
» The first class, of 128 new officers, will graduate March 1, Marlan said. But while those new recruits undergo training, there’s a gap that existing officers fill by working overtime.
» In testifying before the Legislature last year, MDOC officials said hiring retired officers part time would be a cheaper alternative to the overtime pay and faster than waiting for new, more expensive, employees to come into the workforce. Retired officers don’t come with training costs, ongoing health insurance coverage or retirement contributions.
» Under Public Act 432, retired officers would be less than a full-time corrections officer, and the number of hours retirees could work would be limited.
» A sunset clause allows the MDOC to hire back the retired officers on an hourly wage—while they still receive pension payments — until Sept. 30, the end of this fiscal year.