East Michigan News

An analysis by nonprofit research and educational institute Mackinac Center for Public Policy has found that the state's largest 100 municipalities are facing a growing debt to pensioners. 

Ceanna Hayes, author of "How Does Your City Weigh Out?" on a Mackinac Center for Public Policy blog, writes local government debt to pensioners is an issue that will continue to grow. 

“When the Mackinac Center for Public Policy analyzed Michigan’s 100 largest municipalities in 2016, we uncovered a staggering $4.6 billion which local governments owed their retirees,” she wrote. “In 2019, our research shows that the obligation has grown: Michigan’s 100 largest municipalities now owe $5.57 billion in pension debt.”

Depending on location, some municipalities are well-off and have little unfunded liabilities, but some others are in dire condition. Hayes says something needs to be done to prevent the government from spending more taxpayer money than needed. 

“Fiscal health in a pension system, much like a person’s physical health, is critical,” Hayes wrote. “Failing to properly fund a pension system puts at risk the fates of retirees. Delaying payments into the system increases the amount of money that will later be needed to cover these costs.”

Hayes compares individuals caring for their personal health to live well to municipalities making pension funding a priority. 

“Local leaders must recognize that when they fully fund their pension system, they invest in its long-term health and protect the promises they made to their retirees,” she wrote.