MID-MICHIGAN (WJRT) (03/12/18) - A new report by the Michigan Department of Treasury shows that more than 100 municipalities don't have the necessary funds for employee pensions and healthcare.
Christoper Douglas, a University of Michigan-Flint economics professor, said pension and health care liabilities collectively are underfunded by about $15 billion statewide.
"It's a real concern because retirees expect to get what they're promised and for communities to make those promises happen, they're going to have to raise taxes or cut back on local public services," Douglas said.
In December 2017, Gov. Rick Snyder passed the Protecting Local Government Retirement and Benefits Act.
The act is essentially a means of adding state oversight to municipalities facing underfunded pension and health care costs. It requires those communities to report their finances six months after the end of their fiscal year and develop a corrective action plan.
"The problems we're facing now are due to the promises made by politicians in the 1960s and 1970s. Another problem is that cities that have this problem are cities that have seen a loss of population like Detroit, Flint and Saginaw," Douglas said.
Municipalities have an option to apply for a waiver. However, those municipalities must approve a plan to show that their underfunded status has been addressed.
To view a full list of municipalities with underfunded retirement liabilities, click on the "Related Links" section on the right side of this page.