LANSING, Mich. — Hundreds of police officers and firefighters rallied Wednesday at Michigan’s Capitol, protesting yet-to-be-introduced legislation they fear could lead to cuts in retiree health and pension benefits.
The demonstration was designed as a show of force to persuade majority GOP lawmakers to stick with consensus recommendations included in a report ordered by Republican Gov. Rick Snyder.
Snyder is concerned about unfunded liabilities at the local level — $10.1 billion for retiree health care in roughly 340 municipalities and $7.5 billion for pensions in nearly 600 communities. Public safety officers agree the problem must be addressed but say the state should not interfere with collectively bargained benefits.
GOP legislative leaders were waiting to introduce bills to see if an agreement could be reached among the House, Senate, governor’s office and possibly the leaders of unions and public safety agencies. The legislation may be proposed Thursday, which would give legislators just two weeks to vote if they decide to try to push it through this year.
“I don’t want to go backwards. I fought for health care. There are times I declined a raise so that we could get better health care or a better pension,” said Mike Worthington, a 59-year-old firefighter in Grand Rapids. Firefighters made concessions and suffered layoffs when the economy tanked, he said, and have not been compensated appropriately in better times despite promises from city officials.
Republican-sponsored legislation that would have reduced retiree health benefits for municipal workers died a year ago, which led Snyder to establish a task force of lawmakers, union leaders, municipal officials, business executives and retirement experts.
They estimated that many cities spend 20 percent of their revenue on retiree pension and health care. They proposed that Michigan require municipalities to prefund new hires’ retiree medical costs, institute reporting rules and help identify local governments facing substantially underfunded pension and retiree health obligations. But the group failed to agree on potential benefit cuts and what oversight powers a board of state and local appointees should have in communities. It cited concerns about changing union contracts.
Amber McCann, spokeswoman for Senate Majority Leader Arlan Meekhof, said he prefers that a plan be introduced for discussion in coming weeks but he “is not necessarily married to the idea” that it has to be acted on in December.
“While the work group put forth good suggestions about ways that we could go about diagnosing the problem … the work group arguably stopped short of prescribing specific solutions for how to tackle those financial difficulties,” McCann said. “The majority leader thinks that then it becomes the responsibility of the Legislature to come up with some solutions to consider.”
Meekhof wants the state to provide a “pathway” so governments address their liabilities — whether with increased revenue locally or benefit changes, she said.
Mark Docherty, president of the Michigan Professional Fire Fighters Union, said legislators should trust municipalities to “do the right thing” and not supersede local control. He noted there already is a law that empowers the state to appoint emergency managers in financially distressed communities.
The bills, he said, most likely would ensure that cities that can pre-fund health care to do so.
“The cities that can’t fund it and have no money to do it, there’s no answer in here for them. We’re upset about that, too. We want to see a revenue discussion also and a way to help these communities out,” Docherty said.
According to the task force, local governments with the largest unfunded retiree health liabilities are Lansing, Warren, Flint, Taylor, Pontiac, Saginaw, Kalamazoo, Dearborn, Southfield and Ann Arbor.
Task force report: http://bit.ly/2tnbXHz
This story has been corrected to state that the Senate majority leader is Arlan Meekhof, not Amber McCann.