LANSING — House Speaker Matt Hall’s war on so-called “ghost employees” stalled in the recently passed state budget, as most agencies received authorization for as many or more classified employees as in 2026.
Hall, R-Richland Township, had boasted of eliminating about 2,000 funded but unfilled state government jobs in the 2026 budget and had pledged in February to eliminate 3,000 more for the 2027 fiscal year, which begins Oct. 1.
Instead, Hall said he had to settle for a reduction of about 250 full-time equivalent positions (FTEs) across state government, with 110 of those funded but unfilled positions coming from the Michigan Department of Corrections and another 100 from the Michigan State Police.
But the new budget, which was passed July 3 and awaits Gov. Gretchen Whitmer’s expected signature, also added FTEs in certain areas, including 150 new FTEs in the Department of Health and Human Services to expand operations at the new Southeast Michigan State Psychiatric Hospital. Overall, the budget calls for a net reduction of only 25 FTEs in Michigan’s classified civil service, for a total of 54,318, records show. By comparison, the 2026 budget imposed a net reduction of 1,788 FTEs.
For the 2027 budget year, nine state agencies are funded for more FTEs than in 2026, five are funded for the same number as they had in 2026, and only six received a smaller allocation. For 2026, 15 out of 20 state agencies received an FTE cut.
Though money that’s budgeted for state workers who don’t get hired normally returns to state coffers at the end of the year so it can be spent the next year, Hall said he believes state agencies regularly use the unspent money to create “slush funds” or spend it on other program costs.
“We wanted to cut more but we got 250,” Hall said in a July 14 interview. He said his sole concern was cutting “fake workers” and he’s supportive of funding real jobs, like those at the new psychiatric hospital. “I’m happy with the outcomes because we made progress,” he said.
The number of funded FTEs doesn’t directly equate to the number of state employees, and not just because of job vacancies. State government has both part-time and seasonal positions. Two seasonal employees who each work full-time, six months a year, would equate to one FTE.
At a July 7 news conference at the Capitol, Hall described the budget as “the most decisive victory for the Republicans in a long time,” saying it contains no tax or fee increases and no withdrawal from the state Rainy Day Fund. He also said the 2027 budget is smaller than the current year budget, but that assertion is disputed by a Detroit Free Press analysis and by a report from the Mackinac Center for Public Policy. The budget, presented as totaling $75.2 billion, appears to undercount DHHS spending by several billion dollars through the use of contingency funds, and K-12 spending by nearly $2 billion by dramatically reducing federal revenue projections. Leaving aside federal funds, spending from state funds is about $1.1 billion higher than in 2026, fiscal agency records show. Hall said July 14 that he maintains that the 2027 budget is smaller than the 2026 budget.
At the news conference, Hall punted the “ghost employee” issue into the 2028 budget negotiations.
“There’s another 3,000 that we found and we’ll get rid of those next year,” Hall said.
The term “ghost employee” normally refers to someone who is getting paid but not working. That’s not how Hall is using the term. House Appropriations Chair Ann Bollin, R-Brighton, did not dispute in a February interview that the term “ghost employee” is a mischaracterization, but she said that term, or “phantom employee” is easier for the public to understand than “unfilled FTEs.”
State Sen. Sarah Anthony, D-Lansing, chair of the Senate Appropriations Committee, said in a July 14 email that “”Hall and the House Republicans love a good sound bite, especially if he can tear down hardworking state workers in the process.” But she said it’s difficult to legislate around accusations “if they aren’t based in fact.”
Anthony said the state relies on thousands of hardworking employees. “They’re not ghosts,” she said. “They’re very real and essential. I don’t believe in making workers the scapegoat when really it’s politicians in Washington DC who are shortchanging us.”
Peter Neu, general counsel for the Michigan Association of Governmental Employees, which represents state workers who don’t belong to a union, said in a July 14 interview the attack on funded but unfilled state government positions is a form of “political gamesmanship,” since “certain voting demographics like to hear that they’re making government smaller.”
Relatively low pay for certain difficult jobs results in difficulties recruiting and retaining employees and high vacancy numbers for certain jobs, including corrections officers, Neu said. Any unspent funds allocated for those positions lapses at the end of the year, so there is little budgetary advantage in removing the funding and it creates a risk of not having funds available to pay employees if and when recruitment improves, he said.
At the Corrections Department, there are more than 1,000 unfilled positions, despite aggressive state recruitment efforts. That results in forced overtime, which leads to employee burnout and more vacancies, Neu said.
“It wouldn’t be fair to call these vacant positions ghost positions,” he said.
When the state had a defined benefit pension plan, there was a strong incentive for employees to stay in their jobs for a career, Neu said. But since that plan was closed to new employees in 1997, state workers have 401(k) plans that are portable should they receive better job offers elsewhere, he said.
Contact Paul Egan: 517-372-8660 or pegan@freepress.com.
This article originally appeared on Detroit Free Press: New state budget reflects lack of belief in state employee ‘ghosts’
Reporting by Paul Egan, Detroit Free Press / Detroit Free Press
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By Paul Egan, Detroit Free Press | USA TODAY Network
