Lansing — Hundreds of police officers and firefighters rallied Wednesday at the Michigan Capitol, a show of force from public safety unions fighting potential cuts in retirement benefits as legislators contemplate local government reforms.
A proposal has not yet been introduced, and Republican leaders say they are taking steps to address public employee union concerns as they finalize a plan to address looming budget-busting bills for local governments that have promised benefits they cannot afford.
But union officials say early drafts of the legislation they saw went far beyond recommendations from a task force appointed by Republican Gov. Rick Snyder and could threaten benefits for new, active and retired local government employees, including police and fire.
“These are jobs that most people are unwilling to take,” said Robert Stevenson, executive director for Michigan Association of Chiefs of Police, noting an Oakland County sheriff’s deputy was struck by a vehicle and killed on Thanksgiving Day.
“But there have been traditional incentives for these sacrifices. You have job security and knowledge that at the end of your career, you would have a pension and benefits. That was certainly the deal I made when I began my police career 15 years ago.”
Snyder, Senate Majority Leader Arlan Meekhof and House Speaker Tom Leonard have been meeting “multiple times a day” to discuss the pending legislation, according to a spokesperson for Meekhof, R-West Olive. Snyder and his staff have also been meeting with union officials and other task force members in hopes of reaching a compromise.
“There has been some progress made, but be vigilant,” Jim Tiganelli, president of the Police Officers Association of Michigan, told union members. “Those calls that you’ve been making the last few weeks, they hear them. Believe me, they did not want to see this today.”
Police and fire officers carried signs Wednesday urging legislators to “save our benefits” and others that read “saving your lives, losing our healthcare.” Speakers offered support for recommendations by the governor’s task force and urged legislators to stick to those.
“Our guys retire early because it’s difficult on the body,” said Douglas Brown, a 58-year-old who recently retired from the Bloomfield Township Fire Department after 36 years of service.
“I, myself, am a cancer survivor, and I’d’ hate to see the guys lose these benefits they worked so hard to obtain and were promised.”
Large public safety union protests helped kill a reform proposal introduced late last year, but Snyder and GOP House and Senate leaders have each said that addressing unfunded liabilities remains a top priority this fall.
A proposal could be introduced as soon as Thursday in the state House, and sponsors are pushing for action in the next three weeks before a holiday break.
Meekhof called Wednesday’s rally “subdued,” suggesting a breakthrough in negotiations the previous night “probably has changed the tenor of the folks on the lawn today.”
“They have the right to redress their government, and they’re doing that,” he said.
Cities and counties across Michigan face a combined $7.4 billion in unfunded pension liabilities and $10.3 billion in unfunded retiree health care benefits, according to a July report from the governor’s task force.
The report called for new fiscal reporting requirements, a “stress test” system to identify risks, a new Municipal Stability Board to develop a corrective plan and minimum pre-funding requirements for retiree health care.
But the legislation is expected to go beyond that, requiring local governments who have large unfunded liabilities to develop a concrete plan to address them. Early drafts would also preclude cities and counties from offering direct health care subsidies to retirees, instead limiting them to a stipend or defined-contribution plan.
Pensions are protected by the state Constitution, but retiree health care benefits are not. Under a 2005 Michigan Supreme Court ruling, retiree health care benefits are only guaranteed if a public employer binds itself contractually to provide them.
A proposal will originate in the House, but Senate Republicans have also been helping craft the legislation in hopes of creating a version that could win quick approval in both chambers.
“We’re trying to preserve and protect what (public workers) bargained for, and also local units of government, what they bargained for,” Meekhof said. “Let’s just make sure you fund them. Figure it out. Put a plan together.”
Only a small number of communities are “truly in a dire financial situation” and need pressure to take corrective actions, said Amber McCann, Meekhof’s spokeswoman.
Cities such as Lansing, Warren, Flint, Taylor, Pontiac and Saginaw have each underfunded promised retiree health care benefits by more than $200 million, according to the task force report. Kalamazoo, Dearborn, Southfield and Ann Arbor each have more than $162 million in unfunded retiree health care liabilities.
County governments in Lake, Jackson, Saginaw, Genesee, Eaton and Bay have unfunded liabilities that could make them subject to requirements in the legislation, said Steve Currie, executive director of the Michigan Association of Counties.
He attributed unfunded retiree benefits to “a perfect storm” of rising health care costs and limitations on property tax revenue recovery after the Great Recession.
“We want to make sure we’re still able to recruit talent and provide services to our citizens in the best way possible,” Currie said.
House Republicans crafting the legislation say it could help retirees in struggling communities that could end up forcing cuts on their own.
“Obviously, part of the driver for this is preventing (local government) bankruptcies that would harm existing fire and police employees and retirees,” spokesman Gideon D’Assandro said earlier this week.
Several Democratic lawmakers joined police officers and firefighters outside the Capitol on Wednesday morning, vowing to fight to protect retiree benefits.
State Sen. Rick Jones, a Grand Ledge Republican and former Eaton County Sheriff, also spoke out against any potential cuts.
“Firefighters saved my bacon many, many times,” Jones said. “I’ve got your back, and it’s not going to happen on my watch.”