Managing legacy costs is weighing down Lansing’s budget. As of July, the city has more than $700 million in money that has not been set aside to pay for retired city worker’s pensions and healthcare. In 2018, the city only had $130 million saved for unfunded pension liabilities.
The gravity of the city’s financial sickness is now spreading to current city employees. Over the summer, Lansing’s Financial Health Team recommended new hires be given a defined contribution pension plan rather than a defined benefit plan--meaning both parties contribute.
With a set amount of money, and more people retiring, the city did not budget for the massive amount of money they owe.
The Lansing city council candidates all agree that city employees deserve to get their pensions, but candidates don’t come to a consensus on where they’ll get the money to address unfunded liabilities.
Time and Money
Yanice Jackson-Long is one of the four candidates running for one of the two at-large positions. She said it’s important to grant everyone their pension, but the city needs to cut costs and relocate funds.
“I definitely think that everyone that’s been promised a pension should get that pension. They’ve been depending on that for years and it’s been promised to them so it’s crucial that they get that.”
Ward 1 incumbent Jody Washington has a similar view. She said she is aware of the debt, but dealing with that debt is a long-term process that’s not going to be resolved quickly.
“This debt has been here for years. It does not need to be paid over night, but we must get a handle on itand I think we need to examine our processes, see where we can get cost savings, stay on the plan of paying off these legacy debts. We must keep an eye on our money managers on how they are investing and what our return is.”
The Long Game
Carol Wood is an incumbent and current President of the council. She is running for re-election as a member at-large. She said she wants to assure people that legacy costs are not being put off and the city’s working to find a solution.
“We’re making adjustments every month, every year to try to make sure that these legacy costs are going downward and not upward.”
Patricia Spitzley is an incumbent running for re-election as a member at-large. She said the city is trying to address the problem. Their financial health team made recommendations to the council over the summer, and Spitzley said their working on it.
“One of the things they suggested was the hiring of a chief strategy officer and we’ve done that. And so that is the first step I think in looking at our resources and doing a top down review of our finances, our departments and looking to find efficiencies there as well.”
Julee Rodocker is also running for an at-large position. She said cutting costs by looking at city overtime and making an adjustment to the city workers’ final average contributions would make legacy costs more payable.
“I’m not against them in any way, shape or form. I want them to get their pensions. However, it’s up to our elected officials to get finances in order so we can keep our promises.”
Brandon Betz, a 1st Ward candidate, said he is worried that one of the solutions will be to cut costs by cutting public services, and that federal and state assistance should not be out of the question.
“I stand with people who say that is unacceptable. We need to have our vital human services in Lansing. We need to take care of our people and there are a lot of people who are struggling in our city that still need to be taken care of. So, I think we are going to need to work with the state and the federal government to solve these problems.”
Adam Hussain is running unopposed for his current 3rd ward seat. He did not participate in the series after multiple requests for comment.
Right now, the City of Lansing spends roughly 22% of its budget on legacy costs. That’s money the city is not spending on new hires, employee healthcare or public services.
Each candidate approaches the problem slightly differently, but all agreed that it is a massive obstacle for the city.
All candidates assure city workers they will get paid their pensions.