Is it hypocritical for a pension recipient to attack pensions?
Originally posted April 7, 2017; updated April 17, 2017
In my March 29 story Not sure about Schor, I suggested that Andy Schor, candidate for Lansing mayor, may be more concerned about the welfare of unions than of Lansing citizens in general. What made me say that was 1) the biggest contributors to his House campaign account were union PACs and 2) after checking with the UAW, he declined to move forward with a bill to make pension details of retired public employees available through FOIA. City council member Jody Washington sent me this email:
I do enjoy a generous state pension, but I was never in a union, so I am not going to give unions credit for the salary and benefits I received. I began working for the state in 1966. There was no collective bargaining for state employees until 1980, and at that time I was in a business and administrative unit that voted against union representation. That unit, which now includes about 5500 state employees, is still not represented.
My interest is public policy, and like any politician, blogger or columnist with integrity, my concern is the common good. I don't favor any special interest group, not even retired state employees. When City of Lansing finances are being devastated by defined benefit pensions, I am not going to shut up about it just because I receive a state pension.
Lansing's unfunded accrued liability for its two retirement systems is $802.9 million. That's over $16,000 per Lansing household. These figures come straight from the latest actuarial reports. (Actuarial reports and other information on Lansing's retirement systems here on this website.)
This does not mean every Lansing household will be billed for $16,000. The debt is spread over 30 years, like a mortgage, only there is no home ownership at the end. The City makes the payments on our behalf. In his cover letter for the 2015-2016 Executive Budget Summary, Mayor Bernero said
Of that $45 million, $6 million was for pension benefits earned in the current year, $15 million was a payment on the pension funding shortfall and the rest was for retiree health insurance.
Those "core services" that are getting crowded out include street and sidewalk repair. The mayor's March 27 press release for the 2018 budget says
So we have total backlog of $236 million for street and sidewalk repair.
"[A]nemic funding from the Michigan Legislature" gets the blame this year; no mention of the $45 million in city contributions to pensions and retiree health care.
Lansing is not the only Michigan city with a serious underfunded pension problem. The issue was addressed at a West Michigan Policy Forum in December. One suggestion was to cut or eliminate retiree health care:
That would be tough for retirees to take. But so is that $16,000 burden borne by each Lansing household.
(Note: The unfunded pension and retiree health care burden for East Lansing households is $8144. The unfunded pension and retiree health care debt is $128,563,856 and the number of residential units is 15,787.)
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