pensions

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.

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.

user cedarbenddrive / Flickr

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.

One dollar bills
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.

Bernt Rostad / creative commons

Detroit’s bankruptcy could impact many people’s daily lives, perhaps the city’s retirees most of all. At a banquet hall in Livonia this week the Detroit Retired City Employees Association held its annual luncheon. Over one thousand people attended. Many of them worry they may lose part or all of their pensions in the bankruptcy. 

Hear the worries, frustrations, and thoughts of retirees with close to 200 years of city service between them in their own voices below.  


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