LANSING - LANSING — The Legislature gave final approval Tuesday to a watered down version of bills that are designed to ensure municipalities fully fund retiree pension and health care plans.
The final version of the bills, now headed to Gov. Rick Snyder for his signature, merely requires more frequent and detailed reporting to the state of retiree benefit plans in cities, townships, villages and counties.
Snyder's spokeswoman Anna Heaton said the Governor still needs to review the final versions, "but he supports the bills as passed."
State Rep. Tom Albert, R-Lowell, was one of the sponsors of the original bills that would have allowed for the appointment of a financial management team that could take control of a municipality's budget in order to make sure that retirement benefits were fully funded. He was one of the few members of the House of Representatives to vote against the bills Tuesday.
"I don't like the bills compared to what we originally introduced. What I cared about was making sure that retirees and active employees who are promised a benefit actually get paid," he said. "I don't have a lot of confidence that the current bills will actually achieve that goal."
The bills that received final passage Tuesday mirror a task force report that Snyder commissioned this summer.
That report calls for communities to issue reports on the fiscal health of their retiree benefit programs more fully and frequently. The state would also develop a “stress test” system for local governments that would act as an early warning. And a three-member Municipal Stability Board in the state Department of Treasury would be created to review a local community's finances and help the community develop a corrective plan.
The biggest change in the bills was the removal of a state-appointed financial management team that could assume control of a town’s budget or force the sale of city assets to make sure that retiree benefits are fully funded.
That proposal drew the ire of Democrats, a coalition of law enforcement officials and firefighters, and municipal government organizations. Some Republicans also balked at taking a vote that would put them at odds with police and fire departments in their districts. When that provision was removed, nearly unanimous votes materialized in both the House and Senate and the police and fire unions signed off on the deal.
The bills are designed to tackle the growing problem of about $18 billion in unfunded municipal post-retirement benefits — about $9 billion of which is related to retiree health care.
Sen. Arlan Meekhof, R-West Olive, said there may be more work to do on the issue next year.
"I was hoping we would have more solutions, but that's not to say there isn't more work to do," he said. "But just not right now."
Contact Kathleen Gray: 313-223-4430, email@example.com or on Twitter @michpoligal.
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