News Story

Pension Spiking, Early Payouts, Second Careers Make For High-Income Cops

East Lansing’s former chief an example

Former East Lansing Police Chief Jeff Murphy retired in 2017. In his last year on the job, Murphy collected $157,258 in total compensation. This included $24,257 in accrued sick time he was allowed to cash out. Another $28,853 in accrued paid time off also helped spike his lifetime police pension to $91,000 a year.

Immediately after retiring at age 51 with 30 years of police service, Murphy returned to work nearby, earning $93,747 each year working in security at Michigan State University.

Just two years earlier, Murphy was a captain in the East Lansing department with annual compensation of $96,362. The gap between that amount and Murphy’s final gross pay of $157,258 highlights how high-level police — and some other public officials — can use state and municipal retirement systems to their advantage and how lucrative they can be.

According to the city of East Lansing, Murphy was a police captain before being promoted to interim police chief on July 1, 2015. He was made the permanent police chief on Jan. 14, 2016. He would retire just 18 months later.

Murphy received the lump sum payments for unused sick time and leave time in his final year. Under state law, the $28,853 worth of accrued leave time was used in the formula that calculates Murphy’s annual pension payouts, which he was eligible to begin collecting immediately. The leave time boosted his annual pension payout by about $7,900.

It is not unusual for police retirement systems to allow employees with sufficient seniority to stop working and begin collecting a pension as young as age 50 or even sooner. Like Murphy, some retired police boost their income further by launching second careers.

Murphy didn’t respond to an email seeking comment. His current position is director of security for the MSU College of Human Medicine.

East Lansing City Manager George Lahanas said that he didn’t think that Murphy acted to maximize his retirement benefits. Lahanas said in an email that Murphy would have had a bigger pension had he stayed on for two more years as police chief.

“I would also like to note that Mr. Murphy diligently and professionally served the City of East Lansing for over 30 years, safeguarding the community by protecting lives and property,” Lahanas said.

OpenTheBooks.com is a nonprofit that has posted several years’ worth of salary data for nearly every government worker in Michigan and other states. OpenTheBooks' salary information contributed to this story.

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.

Commentary

Is it Constitutional to Require Criminal Defendants to Fund Their Own Prosecution?

State Supreme Court considers whether to hear a case presenting this question

Can criminal defendants be required to pay a portion of the costs of prosecuting them? That’s a question the Michigan Supreme Court may soon answer if it takes up the case of one defendant who says that imposing those costs on him amounts to levying an impermissible tax.

Shawn Loveto Cameron, who has asked the high court to hear his appeal, was tried and convicted of assault in Washtenaw County. The trial court sentenced him to prison — 13 months to 20 years — and also ordered him to pay over $1,600 in court costs. Cameron was then entitled to argue his case before the Michigan Court of Appeals, where he asserted that the costs amounted to an illegal tax. The court, he said, lacked statutory authority to impose them.

The appeals court disagreed and upheld the trial court’s decision, so Cameron petitioned the state Supreme Court to hear the case. That court, like its federal counterpart, hears only a fraction of the cases that come its way. If it does not grant his petition, the Court of Appeals' ruling will stand.

Cameron’s argument has raised two questions. Are court costs considered a tax, a fee or something else? And if a tax, does it violate either the separation of powers or the distinct-statement clause of the Michigan Constitution?

He has a strong argument that requiring criminal defendants to pay court costs amounts to a tax. As he explains in his application to the Supreme Court, taxes and fees are different, by design: Taxes are involuntary payments meant to raise revenue, while fees are voluntary payments made in exchange for services received or benefits conferred. Cameron’s prosecutor admitted that the requirement defendants face to reimburse courts for the costs of prosecuting them is a tax, not a fee, and the Court of Appeals agreed.

The case seems to turn on the second question: Is it constitutional for courts to impose these taxes, and are they structured properly? Cameron says no, pointing out that the Legislature cannot delegate its authority to tax to another unit of government, and transferring this responsibility to the courts violates the separation of powers doctrine of the constitution.

Moreover, because court costs vary by jurisdiction — reflecting the expenses of running each court —the statute authorizing them is too obscure to pass constitutional muster. A law creating a legal tax, Cameron argues, would distinctly state a sum and indicate that it is a tax.

The Court of Appeals disagreed, deciding that as long as the costs imposed on the defendant are “reasonably related” to the expenses actually incurred by the court, they are not improper. And, as for the separation of powers issue, the Michigan Supreme Court has said, “The boundaries between these branches need not be airtight.” As long as the Legislature provides guidelines, it may delegate its authority – even its power to tax. Moreover, the appeals court noted, the Legislature has already delegated some of its criminal sentencing power to the courts without violating the separation of powers.

The Supreme Court may allow courts to impose costs on criminal defendants. But is it good policy? No.

Justice is not free, and operating a court means paying salaries and administrative expenses. The state pays judges’ salaries and some of the courts’ operations, and counties use their own tax revenue to cover some of the expenses. Courts fill in the rest with their own revenue-generating measures. Assigning court costs to defendants is one such measure, as is requiring parties to civil lawsuits to pay filing and motion fees. If courts are to assign costs to criminal defendants, it is at least better to charge a flat rate like Washtenaw does. Requiring defendants — many of whom are indigent — to pay a fee for each filing and motion would result in a miscarriage of justice because it would pressure them to take plea deals or guilty pleas to avoid accumulating the fees required by a lengthy and complex defense.

Many defendants are indigent, and that fact presents many problems for a just government. Wealthy people are more likely to have stable employment and housing, meaning that they are less likely than poor people to run afoul of the law and more likely to have effective representation when they do. Court costs are only assigned to people who are found guilty. This puts the courts in the precarious position of hanging their ability to fund themselves on the very individuals who are least able to pay in the first place. Those individuals are also the least able to recover financially from a criminal conviction and are at higher risk of reoffending and incurring even more costs as a result of the debt.

Requiring payments from convicted criminals also introduces a profit motive in our courts. Judges do not assign court costs to prosecutors when defendants are found not guilty, meaning that courts only recoup costs when judges enter guilty verdicts. Although officers of the court are presumably honest people, the practice of allowing judges to generate revenue should raise concerns about whether it violates due process.

Court expenses have gone up in Michigan and nationally over the last few years, handing local governments a financial challenge, and Gov. Rick Snyder created the Trial Court Funding Commission last year to study the issue. Whatever it concludes, imposing costs in a criminal case is an inherently regressive measure that is ineffective and possibly unconstitutional. Policymakers should find a way to do without them – something they may have to do eventually if the Supreme Court takes Loveto’s case.

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.