Fact check: Trump amplifies exaggerated Michigan ‘ghost employee’ claims

President Donald Trump amplified a claim that Michigan Democrats were ‘siphoning’ $5 billion in taxpayer funds
The claim distorts both claims by House Republicans and realities of the Michigan budget
House Republican claims that state departments purposely left thousands of positions unfilled also don’t appear supported by evidence

LANSING — Republicans in the Michigan House leading what they call a crusade against “waste, fraud and abuse” in state government are proposing to cut roughly $6 billion from the annual budget.

But experts are questioning one of their key savings projections: $750 million they say has been allocated for thousands of “phantom” or “ghost employees” in state departments that are instead keeping the money for other uses.

An exaggerated version of those claims made it to the nation’s chief executive on Monday as President Donald Trump reposted a video to his website alleging Michigan Democrats were “caught Laundering $5 BILLION in taxpayer money.”

Michigan Republicans initially thanked the president for posting the video, which was produced by a conservative influencer known for spreading false claims, but later deleted their tweet. Democrats chastised Trump for what they called a “blatant lie” meant to “distract from the disastrous” GOP budget proposal.

The debate comes amid a budget standoff between the state House and Senate that would force a government shutdown if not resolved by Oct. 1.

Here are the facts:

What’s a ‘ghost’ or ‘phantom’ employee, anyway?

The claim: “I think it’s around $177,000 on average each one of these ghost employees is getting, if you count their wages and their benefits,” state House Speaker Matt Hall said last week. “That totals up to, I think it’s $750 million, so it’s almost a billion. And that’s money that they’re collecting from taxpayers.”

The facts: Hall was referencing vacant or unfilled jobs that were allocated in annual budgets, which authorize a specific number of “full-time equated positions” for each state department, meaning the equivalent of one employee working 2,088 hours a year.

Those aren’t “ghost workers” getting paid for no-show jobs, which did happen at least once in 2017 when then-state Sen. Bert Johnson was indicted and later convicted for keeping a woman on his payroll to pay off a debt.

As for the positions highlighted this year by state House Republicans, no one is getting paid for the vacant positions that had been included in the budget. And in a state with roughly 50,000 employees, job vacancies aren’t rare.

But by not filling the positions, state departments are “squirreling away money” that should be returned to taxpayers,” said state Rep. Matt Maddock, R-Milford.

Hall alleged state departments have used unspent money to build a “$6 billion slush fund.” He was referencing “work projects,” which have grown significantly since the pandemic, as the Detroit Free Press first reported. That doesn’t mean the money is not intended to be spent, however, and the vast majority of budgetary funding expires at the end of the fiscal year.

Related:

Multiple experts told Bridge the House plan is built on faulty assumptions.

Mitch Bean, who worked on budgets while leading the nonpartisan House Fiscal Agency under both parties, called the claim of big savings from more than 5,000 absent positions more than misleading.

“It’s bullshit,” Bean told Bridge Michigan in an interview.

“Money gets appropriated with the assumption that these positions are going to be filled, but at the end of the year, if they’re not, money lapses back,” Bean said, calling the allegation of phantom employees “a red herring.”

Bean said if lawmakers believe state departments are intentionally not using money appropriated to them to hire staff, they should task the Auditor General — which works at the legislature’s direction — to investigate.

Roger Kahn, a Republican and former state senator who led the budget committee for eight years, said departments would present requests for funding full-time equated positions they “intended to fill, which may or may not happen.”

“I didn’t find it offensively burdensome or an offensive misrepresentation of what was occurring,” Khan said in an interview. “People come and go in any business and you have open positions that you’re seeking to fill, and so I didn’t feel that this was deceptive in any way.”

‘Phantom’ workers or critical needs?

The claim: “This year, we anticipated 737 phantom workers in the state police,” said Hall, the state House Speaker.

The facts: Bob Schneider, another former House Fiscal Agency official who now works at the nonpartisan Citizen Research Council, said it’s not unusual to see misalignment between actual jobs and those projected in the state budget.

“The challenge for some departments, or all of them, to some degree, can be there’s not always funding in the budget for those positions” even if they are authorized by the spending plan, he said.

“I suspect there are many FTEs showing in the budget that don’t actually have funding,” Schneider told Bridge Michigan.

The state has employed about 50,000 people each year for the past decade, but some departments have been vocal about their struggles to fill vacant positions.

In the most recent quarterly report provided to the Legislature, the Michigan State Police department said it had about 737 fewer full-time equated positions than the current state budget had authorized.

“All FTEs are critical to our operations and the department is constantly working to fulfill vacant positions,” Shannon Banner, a Michigan State Police spokesperson, told Bridge in a statement.

Of those 737 vacancies, about 569 were in MSP post operations and amounted to nearly a quarter of the department’s allotted workforce, which the department told lawmakers was the result of “a large number of retirements and other departures” along with lagging recruitment.

The department said some post operation jobs, along with other investigative positions, had not been filled because doing so “would take troopers off the road” at a time when 122 troopers had just graduated or were in training.

Still, the House GOP budget would cut 298 full-time equated positions from state police post operations.

“We’re not going to pay that salary in advance for people they can’t hire,” Maddock said last week. He blamed the recruitment woes on the department’s “horrible leadership.”

No evidence of fraud

The claim: “I think they’re committing fraud, to be personally honest,” Maddock said of state departments that haven’t filled vacant posts in past years. “A lot of people are saying that,” added Hall.

The facts: To date, there is no evidence of any fraud by state agencies with respect to unfilled job openings. Hall admitted as much a day after appearing to agree with Maddock in a public press conference.

“I would say we’re not sure, but we’re looking,” Hall told reporters.

Hall wouldn’t say if he believes there is any criminal conduct, and House Republicans haven’t provided any evidence of embezzlement or misappropriation of taxpayer funds.

Trump amplifies misleading video

The claim: The video Trump reposted to his Truth Social account Monday claimed Michigan Democrats were “caught Laundering $5 BILLION in taxpayer money” for various purposes, including “questionable gender surgeries for prisoners.”

The facts: The video the president shared appears to be referencing — and exaggerating — House GOP claims that “phantom employees” cost the state between $581 million and $898 million a year from fiscal years 2020 to 2024, for a total of $3.8 billion.

While House Republicans say cutting those vacant positions could save taxpayers money, Hall has acknowledged they have no evidence of fraud by any state department, let alone money laundering.

The video also falsely claims Democrats were solely responsible for the funding in question.

The figures cited by the House GOP point back to several budgets approved by Republican-led Legislatures. Whitmer was in power each of the years highlighted by House Republicans, but state workforce reports show vacant positions were not unique to the Democratic administration.

The fiscal year 2018 budget that was approved by a Republican-led Legislature for state departments overseen by GOP Gov. Rick Snyder, for instance, included funding for thousands of positions that went unfilled.

That GOP-led and -implemented budget anticipated 15,617.50 full-time equated positions for the state health department, but the department ended up with 13,766 full-time workers that year, according to the 2018 state workforce report.

Likewise, the budget included funding for an estimated 13,820 full-time equated positions in the Department of Corrections, but the department ended up with 11,891 full-time employees.