CHICAGO — Veteran Michigan public finance official Gary Olson has left his longtime position as head of the Senate Fiscal Agency, and his counterpart in the House Fiscal Agency is considering retirement after helping lawmakers navigate what promises to be a rough budget-crafting session.
The fiscal agencies are independent legislative entities that craft annual revenue estimates and analyze the impact of bills, among other duties.
Olson joined thousands of other state workers in taking advantage of early retirement incentives implemented in 2010 to generate savings in the current-year budget. Ellen Jeffries, who was deputy director under Olson, has taken over as director.
Olson retired from the state Dec. 31, 2010, and took a job at Lansing-based Public Sector Consultants as a senior expert in public finance and state government policies. He had served as Senate Fiscal Agency director since 1991.
Two other SFA employees left last week as well. Senior economist Eric Scorsone took a job at Michigan State University, where he will teach and lead a center for fiscally stressed local governments. The agency’s long-time business manager, Patricia Schrauben, also left.
About 4,700 employees retired under the new incentive plan, representing about 9.1% of the state’s total workforce, according to House Fiscal Agency director Mitchell Bean, who is eying the option himself.
The plan, introduced by former Gov. Jennifer Granholm, is to replace two out of every three positions, resulting in a final workforce reduction of 3%. It is uncertain whether freshman Gov. Rick Synder will follow the original plan.
Many long-time employees opted to leave after enduring several rounds of budget cuts, rumors of more cuts, and a general atmosphere of uncertainty, according to Bean.
“Things have been awfully tight in state government in Michigan,” he said. “Some departments will see a pretty dramatic brain drain.”
Bean, who has directed the House Fiscal Agency since 1999, said he has will stay on at least through mid-summer, when legislators hope to have a fiscal 2011 budget in place.
“We’ve got so many new members and all these issues that I’ve been talking about for years are coming to a head,” said Bean, 60. “So I plan to stay around to at least get this budget done, and sooner or later will call it quits.”
The state’s term-limit law last year led to major turnovers in the Legislature. The House has 61 new members out of 110, and 95 of them have two years or less of experience, Bean said.
“I’ve never seen that before,” Bean said. “There’s this notion that’s been spread around that experience is bad. Well, it’s not. We’ve got a very difficult fiscal situation right now and there are some extremely difficult decisions that are going to have to be made.”
The Senate Fiscal Agency recently estimated the upcoming budget shortfall at $1.85 billion. The House Fiscal Agency pegs the number around $1.6 billion. Of that, $1.4 billion comes from the loss of one-time federal funds used to balance the last budget, and $250 million from scheduled tax cuts.
“That represents about 18.5% of our general fund budget,” Bean said. “The low-hanging fruit was eaten years ago. We’ve been in recession here in Michigan for 10 years.”
Still, several economic and fiscal indicators are starting to tick upwards.
Bean is preparing for the upcoming revenue estimating conference. The heads of the Senate and House fiscal agencies and the state treasurer provide lawmakers with up-to-date fiscal forecasts Jan. 14.
He said many revenue streams are growing. For example, sales and use taxes — the state’s main revenue source — are up, and job losses have slowed considerably since the 2009 hemorrhage.
“I’ve had to be negative so long,” Bean said. “It feels good to be positive.”