Local governments and police and firefighter unions are keeping a close eye on hearings to begin this week at the state Capitol. GOP leaders are proposing more aggressive state oversight of local retirement funds.
Republicans want an audit of every local pension and retiree healthcare fund. If one is found to be underfunded, there would have to be a plan fix it, or the local government comes under the purview of a state board with sweeping powers.
House Speaker Tom Leonard says the goal is make sure local governments aren’t making promises to their employees they won’t be able to keep.
"This is about protecting the benefits that our hard-working first responders have worked so many years for,” said Leonard.
Local governments and public employee unions are concerned about giving the state board too much power to roll back benefits or force the sale of community assets.
Stephen Currie is with the Michigan Association of Counties. He said no one is arguing that some local governments need to better manage their pension costs. But he says the state bears some of responsibility, too.
“On the revenue side, if we can shore up a little more revenue – that contributes to where we are today," said Currie. "We weren’t able to pay a lot of these liabilities because of the funding cuts.”