Tom Corbett (Pennsylvania): Grade Pending

2011-01-25T11:00:00Z

Tom Corbett. Image via Wikipedia

Pennsylvanians expecting to hear in Gov. Tom Corbett's (R) inaugural speech how he plans to address the Commonwealth's fiscal challenges, including a projected budget shortfall upwards of $5 billion, will have to wait. The speech did not contain a detailed plan to reform employee compensation or rapidly rising pension costs.

But importantly, we do know one thing Corbett won't be doing: offering public employee unions their wish for a one-year extension of labor contracts that end June 30. Unions were hoping to safeguard their members' compensation from Corbett's pledge to balance the budget without raising taxes or fees--and therefore with significant spending cuts.

Corbett ruled out such an extension even before his speech. With contracts for 17 of the state's 19 unions representing 60,000 state workers set to expire, Corbett will have an opportunity to reform public employee salaries and pension benefits, even if he has not said exactly how he will do so.

Although the analysis of Lt. Gov. Jim Cawley's inaugural speech drew significantly less attention, it was Cawley who gave--with the assumed blessing of the chief executive--some more insight into the willingness to tackle public employee pensions.

He said, "we'll seek meaningful and workable pension reform" and that "these solutions will require tough decisions and sacrifices. But, the alternative, the bankrupting of our future, is entirely unacceptable!" Again, a strong declaration of intent to reform, but no specifics yet on what reform will entail.

It is good to hear that the Governor plans to stand strong, because the unions will definitely fight hard against reform. Back in December, the president of AFSCME warned that his union better not bear the brunt of spending reductions. "If it means ripping the guts out of this labor agreement and trying to settle the budget on the backs of employees, we'll have a battle on our hands, no doubt about it," he said.

The Pennsylvania State Education Association is also gearing up for a fight. It announced an 11 percent increase in compulsory union dues and fees. A back of the envelope calculation means the PSEA will have $9 million more in its coffers to fight the new governor, not only on pension reform but his unashamed calls for dramatic expansions of school choice.

Corbett's predecessor, Ed Rendell (D), delivered tough talk on employee compensation, but then proceeded to capitulate to the unions at the bargaining table. While he earned an A for effort, he got an F at the end of his term. As Rendell showed, real talk about unsustainable employee compensation costs is necessary but not sufficient.

It's too early to grade Corbett today, but we will revisit the issue after he gives his Budget Address on March 8. By then, we may have a better idea of whether his tough talk will translate into tough action on pensions and employee compensation.

Matthew Brouillette is the President and CEO of the Pennsylvania-based Commonwealth Foundation for Public Policy Alternatives.

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Martin O'Malley (Maryland): D

2011-01-25T11:00:00Z

Martin O'Malley. Image via Wikipedia

Governor Martin O'Malley (D) released his budget proposal last week, and he is seeking to close Maryland's $1.4 billion budget gap by taking the path of least political resistance. What look like draconian budget choices mask the continued reliance on the same tactics that helped create a decade of structural deficits.

There are actual cuts to spending in local aid and higher education, including an increase in state college tuition after a three-year freeze. Spending on K-12 education, an area that has grown from $3.1 billion to $5.7 billion since 2002, was kept to last year's levels, allowing the Governor to claim a $104 million budget cut.

Of the $949 million in spending reductions in O'Malley's budget, about $104 million comes from modest reforms to the state's pension system. Current employees will be asked to either increase their contribution from 5 to 7 percent, or to agree to a reduction in future benefits.

Unfortunately, that's where spending reform stops. Despite all the "cutting" from the projected budget baseline, the budget is slated to grow by 3 percent in FY 2012. And the Governor continues to rely on fiscal sleight of hand--moving money to the general fund from the capital budget, and replacing capital funds with new bond issues--a maneuver that will fill $251 million of Maryland's budget gap.

While these small reforms to the state's pension system are a move in the right direction, they don't go far enough. Maryland's pension shortfall isn't the $19 billion it officially reports; using honest accounting, it's several times larger, with the system slated to run out of assets by 2024. While bolder reforms are needed, O'Malley has taken a move to defined-contribution pension benefits off the table.

O'Malley's budget is the archetype of an effort to "muddle through" with a patchwork of narrow cuts and accounting gimmicks, instead of real reform to unsustainable compensation practices. As a result, O'Malley earns a grade of D.

Eileen Norcross is a Senior Research Fellow at the Mercatus Center at George Mason University, where she is the lead Researcher on the State and Local Policy Project, and a regular contributor at PublicSectorInc.org. She is the author of the forthcoming paper, "Maryland's Fiscal Slide," in the Maryland Journal.

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Christine Gregoire (Washington): D

2011-01-25T11:00:00Z

Christine Gregoire. Image via Wikipedia

State employee salaries, health care and pensions are unsustainable in Washington state. In light of this fact, it is disappointing that Governor Christine Gregoire (D) did not even mention employee compensation in her State of the State address.

Washington state employees earn $4,302 more per year in salaries and benefits (excluding pensions) than the average private sector worker. A large part of this gap comes from health benefits: the state pays for 88 percent of the cost of a Cadillac health plan for state workers.

A 2008 study by the Washington Roundtable determined that state employee health care costs were 5.8 percent higher than for large private employers, and that the average monthly contribution of state employees nationwide for family health care coverage was nearly four times that of Washington state employees.

In the 2011-13 budget, Governor Gregoire proposed to address this by raising state employees' contribution to health care from 12 percent to 26 percent of premium, but settled with the unions at 15 percent. By contrast, private sector employees typically pay around a quarter to a third of their health insurance premiums.

Retiree health benefits are also a major concern. Washington state has an unfunded retiree health care liability of between $7.5 and $10 billion. These are not contractual benefits, like pensions, and they can be changed but the Governor offered no solutions to reduce this unfunded liability.

Meanwhile, the State Actuary has warned that pension funding gaps have grown due to "delayed and suspended contributions, increased benefits and investment losses." The state pension system lost $16 billion in the stock market in the past two years plus it did not earn the 8 percent annual return that was assumed in the pension actuarial assumptions. The Actuary estimated it will take 10 to 20 years to recover these recent investment losses. This recovery plan includes tripling contributions from all employers (including school districts) for the next twelve years, placing a huge burden on local taxpayers.

Gregoire Gov. Gregoire did negotiate a 3 percent pay cut (with reduced work hours) for state employees in the three largest public employee unions. She is also proposing pension reforms that would prevent automatic cost-of-living increases for state employees. These are positive steps but do not go nearly far enough.

Overall, Gregoire has not presented a plan to deal with the long-term unsustainability of state employee salaries, health care and pensions. Unless action is taken to control these costs in the near future, Washington will be laying off thousands of state employees and teachers in order to fund pensions and retirees' health care. For failing to prevent this outcome, Governor Gregoire earns a grade of D.

Bob Williams is the President of State Budget Solutions, and Founder and Senior Fellow of the Evergreen Freedom Foundation. He has been involved in public policy in Washington state for over three decades.

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Deval Patrick (Massachusets): C

2011-01-25T11:00:00Z

Deval Patrick. Image via Wikipedia

He only hinted at reform in his Inaugural address earlier this month, but Massachusetts Governor Deval Patrick (D) unveiled a set of pension reforms last week that extends beyond the mere closing of loopholes, as had been the focus of reforms enacted in 2009 and proposed but not enacted last year.

Massachusetts has neither the best nor the worst funded pensions in the country: according to a recent Northwestern University study, we rank 24th in the sustainability of our state pension system. However, as in most states across the country, pension costs are rising sharply as a result of the recent market downturn and are a major pressure on the state budget. All told, the Governor expects his plan to realize $7 billion in savings over the next 30 years, when combined with his earlier reforms.

The governor's "Pension III" reform plan leaves much to be desired. It fails to address the structural problems inherent in a defined benefit plan that can be addressed by moving new employees to 401(k)-style plans. It also does not cap the state's generous benefits to current retirees. Worst of all, it makes few changes to benefits for current employees, who may continue to accrue benefits on the old, unaffordable schedule.

Perhaps the most alarming comments about Patrick's pension reforms came from public employee unions, which voiced qualified support for the proposal. The head of the Massachusetts Teachers Association told the Boston Globe, "I'm glad he's maintaining the benefit levels and not making any changes to the current situation for current employees.''

That said, the Governor's proposal would make pension benefits less expensive for workers hired in the future. The focus on new workers avoids a pitched battle with public sector union leaders eager to keep obligations to current workers in place. Despite the title, the reforms apply to pensions and retiree health care, with $2 billion of the savings coming from cuts to retiree health benefits.

Under the Governor's plan, future public sector workers would be required to work five additional years, contribute more to their pensions and face penalties for retiring early. These are steps in the right direction, but because the changes only apply to new employees, it will be years until the savings are substantial.

Some changes, which are essentially intended to curtail abuses of the system, do apply to current workers. One would attempt to restrict pension "spiking," by preventing employees from basing their full career pension on a sharp late-career rise in income, unless the employee received a bona fide promotion. Employees would also be forbidden to draw a pension as a retiree while holding elected state office. And convicted felons would forfeit any benefits received after the date they committed offenses, instead of only after conviction--a particularly relevant provision in Massachusetts, where former House Speaker Salvatore DiMasi is drawing a pension while awaiting trial on corruption charges.

While Patrick's proposal would somewhat reduce pension costs, it would also postpone the state's reckoning with its unfunded liability, moving the target date for full funding of the system from 2025 to 2040. That will ease this year's budget decisions by allowing the state to postpone a $900 million payment that it is supposed to make in July, but will add to the interest costs borne by taxpayers in later years.

The governor's reforms to retiree health obligations underwhelm along with the pension changes. Patrick claims that his plan would save on retiree health care costs to future workers. However, the plan does little to address current retiree health benefits, a major cost center which the state has legal flexibility to adjust.

Governor Patrick's record on active employee health benefits is better than his record on retiree benefits. He spoke in his inaugural of providing tools to mayors and town managers seeking to control health care costs. Escalating health care costs for public sector employees are too big to ignore, even for labor-friendly public officials such as Patrick.

In 2007, Patrick signed legislation enabling cities and towns to enroll their employees through more cost-efficient state Group Insurance Commission, which may expose employees to higher copayments and out-of-pocket costs. But so far, only 31 municipalities have opted in, because local unions have effective veto power over the decision to join.

Last week, Patrick announced his support for a bill that would take away unions' veto over GIC membership, unless those unions agree to a local plan with similarly low costs. This reform, also backed by the State House Speaker Robert DeLeo (D) and Boston Mayor Tom Menino (D), would significantly strengthen municipalities' hands in their efforts to control health care costs.

Overall, Patrick's rhetoric and record on public employee compensation issues is a mixed bag, with a number of positive steps, and also many missed opportunities. This earns him a middling grade of C.

Frank Conte is the Director of Communications and Information Services at the Beacon Hill Institute at Suffolk University in Boston.

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Chris Christie (New Jersey): B

2011-01-25T11:00:00Z

Chris Christie. Image via Wikipedia

Chris Christie's State of the State Speech opened with a fair bit of self-congratulation, and for good reason: after one year in office, Christie really does have a lot to brag about. As Christie notes in the speech, he addressed one of the country's largest budget gaps with deep spending cuts while allowing a tax increase to sunset, implemented a meaningful (if imperfect) property tax cap, and made real progress on reforming the way municipalities write contracts with their employees.

Christie's record should be viewed in light of the fact that his achievements were passed through a legislature with a Democratic majority. Despite his combative public image, Christie has been a skilled compromiser and has attracted broad, bipartisan support for much of his agenda. Of course, these compromise reforms haven't always been perfect--such is the nature of compromise. But they've been pretty good, and Republicans are likely to have another bite at the apple all by themselves if they retake the state's legislature in elections this November.

Christie's first budget included cuts in all departments of state government, and defied conventional political wisdom by allowing New Jersey to sunset a temporary income tax surcharge on high earners, and thereby reassert its competitive tax advantage over New York.

He even managed to cut nearly $1 billion from aid to school districts while maintaining the political high ground in his fight with teachers' unions--noting that districts could absorb this reduction without program cuts if unions would agree to a one-year pay freeze and a 1.5 percent of salary contribution toward health premiums. Most unions wouldn't agree, and at Christie's urging voters defeated school budgets in record numbers in referendums last spring.

Christie and legislative Democrats also passed a property tax cap, which limits the growth of local tax levies to 2 percent per year, unless voters approve a greater increase. This cap is better than what came before it, but it has a significant problem--it exempts growth in health care and pension expenses, which are two of the most important drivers of local spending growth. The legislature will need to enact separate reforms to pensions and health care if the cap is to be effective, and that is on Christie's agenda for the coming year.

So why does Christie get a B instead of an A? It's because of some missed opportunities last year and some problematic reform ideas for the coming year.

There were a lot of good things about the Fiscal Year 2011 budget that Christie proposed and got enacted with few changes last spring. However, Christie brags twice in his speech that this budget was "balanced." Christie says he is bringing a "culture of truth" to Trenton; unfortunately, the truth about the FY11 budget is that it was about 10 percent out of balance.

Christie continued a long tradition in New Jersey of failing to make the state's annual required contribution ("ARC") to its employee pension funds. This is a way of implicitly borrowing money: the state makes valuable promises of future pension payments to public workers, but sets aside no money to fund those promises. That payment should have been more than $3 billion, on a general fund of $28 billion.

Christie had his reasons for skipping the payment; given how far out of balance the state was when he entered office, there was a good case for taking some time to achieve real balance. Unfortunately, as discussed below, Christie sent signals in his speech that he is in no hurry to start making significant pension contributions.

Looking forward to next year, the speech sets pension reform as one of the three key agenda items for 2011, and it's good to see the governor place such a high priority on pensions. His reforms also include a good feature that is being seen in few states--instead of just cutting back pension benefits for new hires, Christie would also trim the benefits that existing state workers can accrue during future years of employment.

Unfortunately, Christie is missing an opportunity by not proposing to move to defined-contribution pensions for any class of workers. Instead, his reform just tweaks the current defined-benefit system by raising employee contribution rates and reducing the generosity of benefits.

The problem with this approach is that it can easily be reversed retroactively, as New York taxpayers have learned the hard way through several rounds of pension tightening and loosening since the 1970s. Christie won't be governor forever, and it's likely his pension reforms won't be law forever, either.

Another problem is that Christie talks about these reforms as a necessary condition before the state will make its pension contributions. "If we can make real reform a reality, the State must also begin to make its pension contributions," says Christie. This is backwards: a failure to reform benefits makes the need to shore up the pension system's finances more urgent, not less.

Troublingly, even if the state does reform, Christie only talks about "beginning" to make pension contributions. He also says that the FY12 budget will be "balanced" and that he wants tax cuts, but only in the context of a "balanced budget." Unless the pension payment is made in full, the FY12 budget will be in fake-balance like the FY11 budget--and as he gets farther into his term, Christie will be less able to rely on the excuse that he faced a budget hole too large to close so fast.

Because of his overstated claims about budget balance and not-quite-bold-enough pension reform plan, Christie earns a B. If he makes next year's pension payment in full, I will be glad to upgrade him to an A-; and if he also comes out for defined-contribution pension reform, he can earn an A+.

Josh Barro is the Walter B. Wriston Fellow at the Manhattan Institute and a regular contributor to PublicSectorInc.org. He is the author of the 2010 report, Do Property Tax Caps Work: Lessons for New Jersey from Massachusetts.

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Bob McDonnell (Virginia): C

2011-01-25T11:00:00Z

Bob McDonnell. Image via Wikipedia

One year into his term of office, Virginia Governor Bob McDonnell (R) spent much of his State of the State address on January 12 trumpeting progress. Ticking off statistics showing relatively low unemployment and high job creation, McDonnell emphasized that "Virginia has done better than most."

The triumphant rhetoric masks unease that the Administration has not delivered on key promises. Alliteratively stating that lingering unemployment "is unacceptable," urban congestion "is unreasonable," and the state retirement system "is unsustainable," McDonnell outlined a program of dramatic spending increases in key areas. While McDonnell used the rhetoric of fiscal restraint, his much-touted budget "surplus" is really the result of accounting tricks that allowed him to spend more without appearing profligate.

"Over the past year, we turned a $1.8 billion shortfall in the Fiscal Year 2010 budget into a $403 million surplus, without raising taxes," McDonnell said in the speech and in media appearances in the past few months. And indeed, to achieve that closure, McDonnell implemented real service cuts, hiring and salary freezes, and innovative financial incentives to state workers who identified savings.

However, "setting priorities, making tough choices, and reducing spending" was only part of the story; gimmicks were also an important part of McDonnell's budget plan. Merchants were ordered to pay July 2010 sales tax collections a month early, shifting $236 million from the FY 2011 budget into the FY 2010 budget. A $620 million state payment to Virginia's public employee pension system in 2011 and 2012 was cancelled. State liquor stores were ordered to raise prices by 2 percent--an implicit tax increase. The state also saw revenue come in $228 million higher than projected.

The cancellation of the pension payment is particularly important, as a budget that does not fully fund pensions is not really balanced. Missed pension payments are financially equivalent to borrowing: the state makes a valuable promise of future payments to current workers, but does not set aside money to fund those promises. If the state had made its pension payments as scheduled, Virginia would have a budget deficit for FY11.

McDonnell points with pride to increased spending on corporate welfare: "Last year, even while cutting $4.2 billion from the FY 11/12 state budget, and reducing spending to 2006 levels, we were still able to prioritize and budget $63.3 million to spur private sector job creation." There's little evidence that the money--including $4.7 million for tourism advertising, $2.5 million film tax credits, $12 million in tax breaks to Northrop Grumman for its headquarters move, and $16 million in the Governor's discretionary "deal-closing" fund--generated much economic activity that wouldn't have happened anyways. McDonnell reiterated a recent call for $54 million more in economic development subsidies.

As for public pensions, McDonnell called for employees to put in a 5 percent employee contribution (currently they pay nothing). While the change is an obvious one (Virginia is just one of four states that pay the entirety of employee pensions), the $311 million a year it will put into the system doesn't come close to addressing its unfunded liability in the tens of billions.

Bob McDonnell came into office in Virginia at the same time as Governor Chris Christie in New Jersey. Conventional wisdom at the time was that McDonnell would achieve great things while Christie would be crippled by an opposing Democratic legislature. Somehow, the opposite has happened: Christie has risen on the national stage after remarkable achievements in his state, while McDonnell has struggled to play a much easier hand in a fiscally conservative manner.

Republican legislators have already begun criticizing the pension underfunding, along with plans to borrow against future transportation receipts and to reallocate sales tax revenues. McDonnell's plans outlined in his speech consequently may have a tough time winning approval. Altogether: C.

Joseph Henchman is Tax Counsel and Director of State Projects at the Tax Foundation. He resides in Arlington, Virginia.

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New York (Grade Pending) and New York City (C-)

2011-01-25T11:00:00Z

Andrew Cuomo. Image by ad454 via Flickr

For New York, E.J. McMahon writes about Governor Andrew Cuomo, and Nicole Gelinas writes below about New York City Mayor Michael Bloomberg.

Andrew Cuomo (New York): Grade Pending
E.J. McMahon

Governor Andrew Cuomo opened his first State of the State address with what he called "an honest analysis of the crisis that we face." Cuomo delivered the goods on that score: by and large, he has correctly identified the fiscal problems facing New York State.

However, his set of proposed solutions is, to date, lacking. The few new policy details emerging from Cuomo's January 5 speech reflected a continuing tendency to prevaricate on key policy challenges, including those involving public employee compensation costs--not a bold and detailed vision to make spending sustainable and New York's business climate attractive.

Departing from the traditional setting of the state Assembly chamber, Cuomo staged his opening message to the New York State Legislature in a much larger convention center, using slides to illustrate an unflinching statistical narrative of the Empire State's policy failures:

"We have the worst business tax climate in the nation, period. Our taxes are 66 percent higher than the national average ... The costs of pensions are exploding ... The State of New York spends too much money, it is that blunt and it is that simple. Our spending has far exceeded the rate of inflation ... State spending actually outpaced income growth ... You look at the chart, you look at the arrows and this is an unsustainable rate of growth and it has been for a long time."

"New Yorkers are voting with their feet," Cuomo said. "Two million New Yorkers have left the State over the past decade. What does this say? It says we need radical reform, it says we need a new approach, we need a new perspective and we need it now."

Best of all, the new governor proclaimed: "We have to hold the line on taxes for now and reduce taxes in the future. New York has no future as the tax capital of the nation. Our young people will not stay. Our business will not come. This has to change."

Cuomo renewed his campaign pledge to seek a two percent cap on the growth of local property tax levies, and said he would close a $10 billion state budget gap without any tax hikes or borrowing.

He also said (for the umpteenth time) that he would freeze the pay of state employees--which, in fact, has long been a foregone conclusion already built into budget projections he inherited from the Paterson administration.

However, Cuomo did not answer calls by local government groups for collective bargaining reform. Nor did he embrace their proposals for a state-imposed pay freeze on the local government level, which would help them cope with a tax cap. Instead, he appointed a "Mandate Relief Redesign Team," comprised of "stakeholders" including public employee union representatives as well as private industry and government officials. This is not a strong start.

As for pensions, Cuomo identified the cost bomb but never returned to the subject of how to defuse it. The governor's intentions on this score remain a mystery.

Cuomo's opening salvo deserved, at best, an "I" for Incomplete. The next grading period comes Feb. 1, when he will present his first Executive Budget.

E.J. McMahon is a Senior Fellow at the Manhattan Institute's Empire Center for New York State Policy and a regular contributor to PublicSectorInc.org. His professional background includes more than twenty-five years as an Albany-based policy analyst and close observer of New York State government, working in both the private and public sectors.

Michael Bloomberg (New York City): C-
Nicole Gelinas

Michael Bloomberg. Image via Wikipedia

Mayor Bloomberg gave his State of the City address last Wednesday. The centerpiece was a push on public pensions. But as E.J. reported in last Friday's New York Post, the reforms fall short of the mark.

The mayor said pension reform would be his "number one priority in Albany." His plan has four parts:

Consolidate pensions systems to save $8 million annually.
Hike the retirement age for new non-uniformed workers from 55 to 65.
Take away uniformed retirees' $12,000 "Christmas bonus."
Convince Albany to give the city the right to negotiate pensions through collective bargaining (right now, state law governs them).

Though the consolidation plank is solid enough, the rest of the proposals are less than ambitious.

For civilian workers, for example, an increase in the retirement age is not enough. The mayor should be pushing a gradual conversation to defined-contribution pensions, or personal accounts to which the city would contribute without guaranteeing. Such plans are the norm in the civilian private sector today.

For uniformed workers, the mayor should be pushing for a minimum retirement age. As it stands now, firefighters, police, and sanitation officers can retire after 20 years, many of them while in their forties.

As for special goodies like the Christmas bonus--of course, Bloomberg is right to want to eliminate it. (Both sides agree that the Christmas bonus isn't a constitutionally-guaranteed pension promise, though the union claims it is a collectively bargained benefit and the city cannot eliminate it unilaterally.) But the mayor should push, too, to eliminate other treats, including workers' practice of racking up overtime in their final years of work to push up their pensions.

On pension negotiations in general, it may seem like smart governance to allow the city to negotiate on behalf of its own taxpayers, who, after all, will foot the bill. But, as McMahon notes, "Bloomberg won't always be mayor." A future mayor could give city workers lavish benefits increases to win re-election, knowing that he would be out of office when the bill came due. Further, Bloomberg "already has the ability to collectively bargain health-insurance benefits--yet has achieved virtually no savings there."

If the mayor were in his first year in office, last week's effort would be a good start. But as the mayor starts his second decade in office, the ideas that the mayor outlined are past their sell-by date. It's growing late, too, for the reforms that we do need. This too-little, too-late effort earns a grade of C-minus.

Nicole Gelinas is a contributing editor at City Journal, the Searle Freedom Trust Fellow at the Manhattan Institute, and a regular contributor to PublicSectorInc.org. She has written extensively on the finances of New York City and closely related agencies, especially the Metropolitan Transportation Authority.

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Rick Snyder (Michigan): Grade Pending

2011-01-25T11:00:00Z

Rick Snyder. Image via Wikipedia

On the issue of public employee compensation, Michiganders will be left hanging for a couple more months.

In a highly-anticipated State of the State address, newly-inaugurated Governor Rick Snyder (R) touched lightly on the topic of government employee benefits. Early on the governor did call attention to $54 billion in unfunded pension and other benefit liabilities, but said nothing further on the topic, giving neither a target for how much these liabilities will be reduced nor laying out a general approach for getting costs back under control. This came in the context of a speech that was vaguely corporatist in nature, with little in the way of strong pro-market material.

Both before and during the speech, Snyder has declined to directly address the issue of collective bargaining in the public sector. The new governors of Ohio and Wisconsin are both talking about ending it. Snyder says that is "not a viable option in the Michigan system"-- but if he chooses not to revisit collective bargaining, the Governor will be tying a hand behind his back whenever he does put forward a plan to contain employee compensation costs.

The governor did promise a series of "Special Messages" starting with a presentation on "Government Reform" in March. It is possible he will lay out more detailed plans then. But the delay is puzzling when you consider that one of the few points where Snyder really took a clear stand in his campaign was the need to speed up the budget-making process in Lansing. Snyder's goal is to have a state budget enacted by the end of May, and obviously government employee compensation will be an important component of that.

Pretty soon, Snyder is going to have to get specific. But for now, it's too soon to issue a grade.

Paul Kersey is the Director of Labor Policy at the Mackinac Center for Public Policy in Michigan.

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Tom Corbett (Pennsylvania): Grade Pending

Martin O'Malley (Maryland): D

Christine Gregoire (Washington): D

Deval Patrick (Massachusets): C

Chris Christie (New Jersey): B

Bob McDonnell (Virginia): C

New York (Grade Pending) and New York City (C-)

Rick Snyder (Michigan): Grade Pending