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pensions

Steve Carmody / Michigan Radio

Tensions among Republican lawmakers are rising over the new state budget.

Some Republican leaders are trying to change teacher pensions to a 401(k)-style plan for new hires. But critics, including Gov. Snyder, say the change would create an unnecessary financial burden for the state. And teachers say the change would be the latest blow to a profession that's already struggling to attract young people.

State capitol building in Lansing
Lester Graham / Michigan Radio file photo

Republican legislative leaders remain committed to closing the pension system to new teachers and instead giving them a 401(k) after getting mixed news about tax revenues.

Money with bottle of pills
Images Money / Creative Commons http://michrad.io/1LXrdJM

The stalled Republican replacement for the Affordable Care Act cleared a big hurdle this week. Lawmakers in the U.S. House passed the bill -- thanks in part to a last minute addition from Michigan Congressman Fred Upton. This Week in Review, Weekend Edition host Rebecca Kruth and senior news analyst Jack Lessenberry talk about Upton's amendment and what the bill could mean for Michigan.

They also discuss a state Court of Appeals ruling that teachers can drop out of their union whenever they like, another attempt by lawmakers to scrap and replace pensions for new teachers, and budget proposals that passed the state House and Senate this week. 

Judge's gavel
Joe Gratz / FLICKR - HTTP://J.MP/1SPGCL0

A Girl Scouts council from Michigan is suing the national Girl Scouts organization for making changes to the employee pension plan without proper consent.

In the lawsuit, Girl Scouts Heart of Michigan claims the national group, Girl Scouts USA, added people to the pension plan, and then passed the added costs on to local councils like Heart of Michigan. Girl Scouts U.S.A. (GSUSA) manages the pension plan for Girl Scouts council employees nationwide.

What happens when a city can't keep its promises to retirees?
Ken Teegardin / Flickr - http://j.mp/1SPGCl0

What happens when a city can't keep its promises to retirees?

Snyder wants to tackle retiree costs in 2017

Dec 15, 2016
Photo of Gov. Rick Snyder
Steve Carmody / Michigan Radio

Governor Rick Snyder wants municipalities and labor unions to jointly study how best to tackle retiree health care costs after Republican lawmakers removed a contentious proposal to aggressively curb the benefits from the postelection agenda.

Michigan's lame duck session ends on Thursday.
Lester Graham / Michigan Radio

The lame duck session for the Michigan Legislature is a time when politicians in Lansing often push through unpopular or controversial bills. Remember the right-to-work law in 2012

This year has been no different as there have been a number of proposals that have been floated through the lame duck session. However, in an unexpected turn, four big ones have been pulled back, which surprised many observers, including Susan Demas and Ken Sikkema who joined Stateside for their weekly political roundup.

The Michigan Senate in Lansing.
Lester Graham / Michigan Radio file photo

Some lawmakers are hoping to pass a bill in this lame-duck session of the Legislature that would force new teachers into a 401(k)-style retirement system, and move the state away from supporting a traditional pension system.

Supporters say it would save the state money in the long term. Critics say it will blow a major hole in the state budget in the near term.

Lester Graham / Michigan Radio

As Detroit approaches the one-year anniversary of emerging from the nation’s largest-ever municipal bankruptcy, Michigan Radio is examining one of the lessons learned.

Lindsey Smith / Michigan Radio

Leaders of the bus system in Grand Rapids and the union representing mechanics and drivers have not been able to reach an agreement over a retirement plan.

That means The Rapid will no longer collect dues on behalf of the union. But The Rapid's spokeswoman Jennifer Kalczuk says pay and benefits will remain the same for now.

Steve Carmody / Michigan Radio

DETROIT (AP) - Pension cuts are kicking in for roughly 12,000 city of Detroit retirees.

The 4.5 percent reduction is a result of Detroit's bankruptcy. Pension fund spokeswoman Tina Bassett tells the Detroit Free Press that about 1,450 retirees with very low incomes have qualified for financial help from a separate fund. Some people will get as much as $180.

Rick Pluta / Michigan Public Radio Network

Michiganders age 50 and over are expected to represent well over half of the voters that show up to the polls on November 4.

That is pretty typical of a non-presidential election. But seniors and retirees are already playing an especially important role in this year’s election.

Perry Seavitt, a 70 year old retired teacher from Freemont, considers himself a Republican. But he is not sure which candidate for governor will get his vote. He says he is leaning toward Democrat Mark Schauer because incumbent Gov. Rick Snyder decided to start taxing retiree pensions.

Steve Carmody / Michigan Radio

State House Democrats are once again calling for a repeal of Michigan’s tax on pensions.

The 2011 tax code rewrite means some retirees are paying taxes on previously untaxed pension income.

State Rep. Theresa Abed, D-Grand Ledge, says it’s unfair to seniors.

“It is wrong to balance the budget on the backs of those on a fixed income with no way to make it up,” says Abed.

The pension tax is expected to generate about $350 million this year.

A bill to repeal the pension tax has been languishing in the Legislature since 2013.

The week in Michigan politics

Sep 17, 2014
State capitol
Lester Graham / Michigan Radio

This Week in Michigan Politics, Emily Fox and Jack Lessenberry discuss the possibility of new teachers losing their pensions, the latest in the Detroit bankruptcy trial, and how Aramark is under fire again.


user jdurham / morguefile

This Week in Michigan Politics, Jack Lessenberry and Christina Shockley discuss new investigations into charter schools, the new education spending bill and the impacts after the removal of state pension plans.

Looking up into the rotunda of the Michigan Capitol.
user cedarbenddrive/Flickr / http://j.mp/1SPGCl0

Some economists say Michigan failed to consider the consequences of ending pension plans for public workers.

The state stopped offering pensions to new employees in 1997. Budget officials say that decision has cut Michigan’s long-term debt by about $5 billion.

A new report from Great Lakes Economic Consulting says the new 401(k) style plans may be cheaper. But it says it’s not fair to compare them to traditional pensions, which provide better protections for both workers and employers.

Steve Carmody / Michigan Radio

Michigan Attorney General Bill Schuette kicked off his reelection campaign today in his hometown of Midland.

In his speech, Schuette touted his record in office, including efforts to combat human trafficking and protect pensions.

“A record that’s strong and clear. It’s a record of being a voice for victims. A voice for the constitution and a voice for Michigan,” says Schuette. “It’s a long election and I’m going to win. I’m going to take my case to the citizens across the state of Michigan.”

Schuette didn’t directly address the controversy over same-sex marriage.

Steve Carmody/Michigan Radio

DETROIT (AP) - Gov. Rick Snyder says he won't reconsider a controversial tax on income of certain Michigan retirees.

Michigan has a large budget surplus, but Snyder tells The Detroit News that revisiting the 2012 tax is not on his radar. He calls it an issue of fairness, saying pensions shouldn't be treated differently for tax purposes than other retirement income.

cash money
Steve Carmody / Michigan Radio

All eyes are on Detroit this week, following Tuesday’s historic ruling on Detroit’s eligibility for bankruptcy. For those living outside the city, it's easy to separate themselves from Detroit's problems. 

But many experts say Detroit is not alone.

Detroit is not Michigan's only city that faces enormous budget challenges. Unfunded liabilities and retiree debt are adding up all across our state.

Ted Roelofs, a contributing writer to Bridge Magazine, recently wrote a piece that argues that other cities in Michigan will not be immune to rising legacy costs that, in part, did Detroit in.

Roelofs and John Pottow, a bankruptcy expert at the University of Michigan, talk with us about the future of other Michigan cities in the wake of Detroit’s bankruptcy.

Listen to the full interview above.

mich.gov / Michigan Government

Today, U.S. Bankruptcy Judge Steven Rhodes ruled that Detroit is eligible to enter Chapter 9 bankruptcy protection, and to cut the pensions of city retirees.

What does it mean for residents? Current city employees? City pensioners?

Eric Scorsone, a municipal finance expert from Michigan State University, talks to us about what lies ahead after today’s ruling.

Listen to full interview above.

Patricia Drury / Flickr

To call Detroit’s legacy costs underfunded would be, well, an understatement.

According to the city’s numbers, Detroit’s pension and retiree healthcare funds are about $9.2 billion short.

But Detroit is not the only Michigan city with major legacy costs — not by a long shot.

Legacy costs, or costs undertaken by local government for future use, have been taken on by more than 280 of Michigan’s 1,800 communities, according to data compiled by Bridge Magazine.

And while Detroit has the highest amount of total unfunded legacy cost, the per capita numbers show a slightly different picture.

Lindsey Smith / Michigan Radio

Benton Harbor Emergency Manager Tony Saunders is breaking months of silence on a proposed city income tax. Saunders says he has some concerns about the proposal.

“I want to make sure we have a strong climate for business investment here. Also, you know this is one of the poorest cities in Michigan, so the last thing I want to see is our citizens being taxed once again when they’re already struggling to make ends meet,” Saunders said.

David Defoe / flickr

Each week, I review the news with political analyst Jack Lessenberry.

Today we discussed Common Core education standards, new details about some practices that led to Detroit's financial crisis, and legislation to refuse adoptions based on religious reasons.

State of Michigan / Michigan.gov

Money in Detroit’s pension fund was misspent on bonus checks, The Detroit News’ Robert Snell reported.

That information is coming from a report on the city’s General pension fund from consulting firm Conway MacKenzie. According to the report, more than $532 million was distributed as bonus checks over the last two decades, instead of staying in the pension fund’s coffers.

The so-called 13th checks — or annual bonuses — weren’t a part of the city’s pension plan. Yet, the report claims that even in the “good and bad years,” the money intended for the workers’ saving plans was doled out early -- which according to the report, was “effectively robbing (the General pension fund) of precious funds necessary to support the traditional pensions the city had promised.”

Rick Pluta / Michigan Public Radio Network

A class-action lawsuit has been filed on behalf of retired public employees against the state for extending Michigan’s income tax to pensions.

Extending the income tax to pensions was part of a tax overhaul adopted by the Legislature in 2011 that scrapped the Michigan Business Tax.

People born after 1945 started paying taxes on pension income last year.

The lawsuit claims the state broke a promise made in writing to retirees.

Detroiters are voting today in one of the strangest and yet most important primary elections the city’s ever had. Those they send to the November runoff will be fighting for jobs which at first will have no power. That’s because everything is now in the hands of Emergency Manager Kevyn Orr, and U.S. Bankruptcy Judge Stephen Rhodes.

Clarita / MorgueFile

By now you’ve heard a bit about Detroit’s Chapter 9 bankruptcy filing. About half of Detroit’s nearly $20 billion in debt is due to shortfalls in the funds for retiree’s benefits. According to emergency manager Kevyn Orr’s estimates, the pension funds are behind by about $3.5 billion and behind in retiree health care funds by about $5.7 billion.

Detroit is not unique in its unfunded pension and retiree health care obligations. Other municipalities in the state are also behind.

Anthony Minghine is the chief operating officer of the Michigan Municipal League.  He joined us today.

Listen to the full interview above.

Sam Beebe / Ecotrust

Detroit’s bankruptcy is getting the headlines right now, but many governments in Michigan could be facing similar financial troubles in the future. Detroit might be just the first of many financial catastrophes in the state.

Detroit’s debt is supposed to be as much as $20 billion. About half of that is blamed on underfunded pensions and benefits for Detroit city retirees.

Last week, Michigan Attorney General Bill Schuette did something many found startling, especially those politically liberal. Schuette announced that in Detroit's bankruptcy filing he intended to intervene on behalf of those who have pensions coming.

AG's office

Michigan Attorney General Bill Schuette says the state constitution protects Detroit pension benefits from being reduced or eliminated by the city’s bankruptcy.

Schuette says he will be in court Monday asking to join the case on behalf of pensioners.

U.S. Bankruptcy Judge Steven Rhodes took control of lawsuits challenging the bankruptcy filing because it puts city pension benefits in jeopardy. But he has not ruled on the substance of the question, which is whether the benefits are shielded by protections in the Michigan Constitution.

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