Rising pension costs may sink plans to hire more cops in Lansing

May 14, 2012

Rising pension costs may throw a monkey wrench into the city of Lansing’s plans to hire police officers next year.

Lansing’s mayor proposed using money from a special public safety millage to rehire nine laid off police officers.    But the mayor’s office released a draft report Monday which says the city will have to come up with nearly two million dollars next year to cover rising police and fire pension costs.  

Another report by EFI Actuaries, which was hired by the city’s pension boards, says the city should also spend another million dollars to shore up its other public employee pension. 

Randy Hannan is the chief of staff to Lansing’s mayor.    He says the city may need to use the public safety millage to cover its increased pension costs.

“What we don’t want to do is we don’t want to bring back the police officers this year only to have to lay them off next year,” says Hannan. “The reality is we’ll only be able to hire as many police officers as we can afford. And that could be a moving target depending on what happens with these pension costs.”

Hannan says a decision on whether to put off plans to rehire the police officers may have to wait until the start of the fiscal year in July.

Lansing voters approved the public safety property tax increase partly with an expectation that the money would pay for rehiring police officers.    The city laid off 36 police officers last year to close a budget hole.

The Lansing city council will vote on the budget plan next week.    City councilwoman Carol Wood suggested the administration was using “semantics” when it suggests the money to pay for the added pension costs could come from the public safety millages approved by Lansing voters last year. 

Hannan countered that the money needed to come from somewhere.   

According to the draft report, the added pension costs are expected to continue to rise during the next few years.   While during the same period, Lansing’s property tax revenues are expected to continue to decline.