This administration remains firmly committed to preserving the state’s economic resources and regularly examining the state’s assets and expenditures. With continued deterioration in state budget conditions, the suspension of performance pay awards for state employees represents a prudent and fiscally responsible course of action. While employees throughout state government continue to do more with less, rewarding a select few of the state’s highest paid employees with monetary bonuses is demoralizing to others. Accordingly, I direct:

A. During the fiscal year beginning October 1, 2003 and ending September 30, 2004, no state department or agency may expend any funds for “Performance-pay awards” authorized under Department of Civil Service Rule 5-3.4(c)(2). Increases in base salary or lump sum awards under the rule are prohibited in Fiscal Year 2003-2004.

B. The Department of Management and Budget, Department of Treasury, State Budget Office, and Office of the State Employer shall take all necessary actions to enforce the requirements of this Directive.

C. This Directive applies to all departments and agencies subject to supervision by the Governor under Section 8 of Article V of the Michigan Constitution of 1963. This Directive is effective immediately, and remains in effect through September 30, 2004.

Your assistance and fiscally responsible action, and the continued hard work of state employees in these difficult times are greatly appreciated.

______________________________
Jennifer M. Granholm
Governor