Unfunded public benefit liability needs reform
State government appears ready — again — to take on the nettlesome topic of unfunded public employee benefit liabilities that many in Lansing and elsewhere say governments at all levels no longer can afford.
Conservatives are pushing reform in the face of $14 billion in unfunded liabilities spread across more than 300 communities in the state.
After ending pensions for new state workers in the late 1990s, Republican legislators are now considering moving all newly hired teachers and local government workers to 401(k)-type plans and cutting municipal retiree health benefits, AP reported.
Statewide, the Michigan Public School Retirement System is underfunded by $26.7 billion, according to the Mackinac Center, a conservative downstate think tank.
The organization reports that, statewide, up to 36 percent of many school payrolls is taken up by the school retirement system payments.
Getting all of this fixed will be neither easy nor inexpensive. And, it’s politically toxic, which is precisely why next to nothing has been done about it to date.
Public employee unions, seeking to preserve traditional benefits for its members, will fight any reform, tooth and nail.
Although we could go on and on and on, piling up statistics and other information about the unfunded liability issue, here’s the bottom line: The systems that are in place are not sustainable, using any math we can find.
Reform must happen and we applaud state government for at least starting the process.
The mess we are in didn’t happen overnight and getting it fixed won’t either.
But it’s time to start.