Lansing — Officials from Oakland and Macomb counties are joining police and fire fighter unions in opposing a new local government employee retirement benefit reform plan introduced last week in the Michigan Legislature.
Oakland County Executive L. Brooks Patterson, Oakland County Sheriff Mike Bouchard and Macomb County Executive Mark Hackel said Monday they oppose the Republican legislation, which could force benefit changes in communities with large unfunded pension or retiree health care obligations.
As introduced, the bills “pose a risk to our communities by undercutting promises that have been made to our employees, and especially, our first responders,” Patterson said in a statement.
Bouchard called the new legislation an attempted “control grab and philosophical club” by the state.
The vocal opposition from the high-profile Oakland County Republicans comes as House and Senate committees plan to begin debating the new legislation Tuesday at 8:15 a.m.
The plan could force public employee retiree health care cuts in some communities, but that would only happen in the “worst-case scenario,” GOP Gov. Rick Snyder said last week.
The legislation would create a five-step process to identify communities with large unfunded liabilities and require them to create a plan to work down long-term debts.
If a struggling city or county fails to create or follow its own plan, the governor would appoint a three-member financial management team that could force action under the state’s so-called emergency manager law.
The state-appointed team would have “broad powers” to resolve unfunded liabilities, including the ability to make changes in retiree health care benefits or direct a municipality to sell off local assets, including buildings or property.
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 task force appointed by the governor that noted many communities have already taken steps to address long-term debts.
Patterson called Oakland County “an innovator in pension and retiree health care reform” but criticized the new plan from Lansing. Bouchard said it is hypocritical of the state to focus on local governments when it has not fully funded all of its own employee retirement funds.
“Going beyond fiscal guidelines and restraints by having the state make changes to the local control of health care and benefits undermines the integrity of this profession and is offensive to those who put their lives on the line every day to protect their communities,” Bouchard said.
Hackel, the Democratic executive in Macomb County, argued the proposal would make it harder for local governments to attract and retain quality first responders.
“Local communities need to protect first responder benefits and negotiate and manage them at the local level,” he said.
Snyder has been working with local government and union groups to address concerns. Hundreds of police officers and fire fighters rallied outside the state Capitol last week a day before the legislation was even introduced.
The 16-bill plan pitched in the House and Senate is “a great starting point and has a lot of great elements,” Snyder told The Detroit News on Monday.
“But I view that as part of the legislative process. Let them have committee hearings. Let’s find out if there are improvements that can be made as it goes through the process.”
While Democrats have been critical, Republicans say the plan for a three-member financial management team is a necessary step to make sure that firefighters, police officers and other local public employees receive the benefits that were promised to them.
They note that the team has limited powers compared with an emergency manager because member powers would be limited to financial matters outlined in the legislation. A state-appointed emergency manager has much broader authority, they say.
“We want to ensure that these benefits are going to be protected. We want to ensure that they’re not going to face a federal bankruptcy judge and lose everything that they’ve spent years working for,” House Speaker Tom Leonard, R-Dewitt, said last week.
“So this is about creating transparency and ensuring that the locals are doing everything that they can to preserve and protect these benefits that these hardworking men and women have fought for all these years.”
Snyder, Leonard and Senate Majority Arlan Meekhof have each called local government retiree reforms one of their top priorities for the remainder of this year. The House and Senate each added and extra session week ahead of a holiday break.