LANSING, Mich. — Michigan Senate Finance Committee Chairman Sen. Jim Runestad said the committee will convene this Wednesday, Feb. 17 at noon to review the unfunded liabilities of local governments’ pension and retirement health care systems.
Officials with the Michigan Department of Treasury will be testifying on their December 2020 report to the Legislature regarding the total unfunded liability of the pension and retirement health care systems — commonly known as “OPEB” — of local communities throughout the state.
“In local bankruptcies, the state is constitutionally bound to make pensioners whole. When local units have unfunded liabilities spiraling out of control, it is the taxpayers across the state who pick up the tab unless action is taken,” said Runestad, R-White Lake. “With both state and local budgets potentially facing future, enormous strain from the loss of business, these funding reports act as an early warning sign before it is too late. Local governments need to be transparent in their reporting for the taxpayers’ sake.”
In 2017 the state passed legislation requiring local governments to be transparent in the reporting of their pension system funding levels. The act was meant to help the state maintain oversight of pensions, improve transparency, and protect the taxpayer by helping to prevent bankruptcy issues down the road.
“Unfunded liabilities will come back to haunt communities if they are not fully funded,” Runestad said. “This is an important issue our committee will be evaluating very closely. According to Treasury, the latest data available shows that entities not in compliance with the 2017 reporting requirements include at least one major city, a county, a township and a road commission, with unfunded liabilities for these non-compliant entities ranging from thousands of dollars to more than $600 million.”
The Senate Finance Committee will hear testimony on the issue Wednesday at noon in Room 403 of the state Capitol. The committee can be viewed online through Senate Television at www.Senate.Michigan.gov.
Anyone wishing to provide information or recommendations to Chairman Runestad can contact the office of Sen. Jim Runestad by phone at 517-373-1758, or by email at [email protected].
According to the most recent data available from Michigan Department of Treasury’s December 2020 report, entities that were not in compliance with the 2017 reporting requirements, along with their unfunded accrued liabilities, include:
• Dickinson County: $27,682,521
• City of Flint, Genesee County: $622,758,837
• Mount Morris Charter Township, Genesee County: $74,812,134
• Tuscola County Road Commission: $16,988,918
• Garden City, Wayne County: $176,029,879