News Story

Michigan is Spending As Much on State Police Pensions as Salaries

Past underfunding means nearly $1 in retirement costs for every $1 in pay

The cost of providing retirement benefits for Michigan State Police employees nearly matched their gross pay last year, with most of the money going toward paying down debts incurred by decades of pension underfunding.

One out of every five dollars spent by the state police last year went for retirement benefits, according to the Senate Fiscal Agency. Total state police spending in the 2015-16 fiscal year was $640.1 million, with $115.7 million of this going toward the retirement system. That compares to $118.1 million paid in gross wages to employees.

More than 75 cents out of every dollar in retirement spending went toward paying down unfunded pension liabilities. Only 19 to 23 cents out of every dollar of the benefit expenses were for pension credits earned by current employees during the year.

According to Senate Fiscal Agency figures, the state police retirement system is $1.2 billion short of the amount its managers project is needed to meet pensions and post-retirement health benefits.

James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy, said that underfunding is causing the state police to vastly overpay for benefits.

“State troopers are offered generous retirement benefits and that’s fine,” Hohman said. “But the underfunding in the system means that they are getting Cadillac benefits at Ferrari prices.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

Michigan House Dems Propose State Contract Preference for Immigrants

Bill is part of Democrats’ anti-immigration enforcement package

Democratic lawmakers in the Michigan House have introduced a bill that would require state contract managers to pursue a goal of awarding at least 5 percent of the spending on state contracts to businesses owned by immigrants.

The bill is sponsored by Rep. Jim Ellison, D-Royal Oak, and co-sponsored by 18 other House Democrats. It would amend a 1980 law that sets a 7 percent contract target for businesses owned by minorities, and 5 percent for firms owned by women.

Ellison, the ACLU and the Michigan Immigrant Rights Center didn’t return emails seeking comment.

To qualify for the special treatment, a person must complete a sworn affidavit affirming that the bidder is an immigrant-owned business and is prepared to bid on state contracts. If the preference targets are not met, the law requires the governor to propose ways to meet them.

The bill is part of a legislative package involving immigration that was introduced by House Democrats on June 8. Here is how Michigan Votes described some of the other bills in the same package:

House Bill 4727 - Michigan Votes: Introduced by Rep. David LaGrand (D)
To prohibit police agencies in Michigan from detaining an individual not charged with a crime on the basis of a 48-hour federal “immigration hold” request, unless there has been a judicial determination that probable cause exists to believe that the individual committed a crime in this state.

House Bill 4725 - Michigan Votes: Introduced by Rep. Jeremy Moss (D)
To prohibit state agency databases from including information that identifies an individual's country of origin, religious preference or sexual orientation.

House Bill 4723 - Michigan Votes: Introduced by Rep. Yousef Rabhi (D)
To charge in-state tuition at state universities and colleges to most resident aliens, including those who entered the country illegally as a child and have been granted a deferral from prosecution.

House Bill 4733 - Michigan Votes: Introduced by Rep. Stephanie Chang (D)
To prohibit granting state contracts to companies or individuals who have contracts to build a U.S. border wall. State officials would have to publish and maintain an updated list based on “credible evidence” of persons who have wall-building contracts.

House Bill 4730 - Michigan Votes: Introduced by Rep. Abdullah Hammoud (D)
To prohibit the state or local government from checking the immigration status of new employees on the federal “e-verify” system, or require a contractor to do so. A government contractor that did use the system would be subject to a fine and barred from other contracts for a year.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.