If every Lansing City employee who is currently eligible to retire did so today, it would cost the city about $600-million in health care and pensions over time. That’s a big chunk of money, and something known as unfunded liabilities. It’s a budget issue, not only in Lansing, but one local municipalities are dealing with across the country.
But while the city of Lansing appears to have a surplus in it’s next budget, the Mayor plans to put that money elsewhere.
They risk their lives for us everyday, on top of that, worry if there will be enough money to support a life after retirement. Firefighters are among city employees who base their futures on city support through pensions and healthcare.
And while Mayor Virg Bernero says Lansing doesn’t have the money to pay all those costs right now, he doesn’t plan to use a projected budget surplus $500-thousand to narrow that gap.
“You will not find the solution to our long term legacy costs in the budget, you will not find it, it’s not there,” says Mayor Bernero.
Instead, the mayor wants the extra money to go to the city’s rainy day fund.
“We’re talking about a rainy day fund of around 1$2 or 13 million and we’re talking about a $5-6 hundred million gap in the pension fund,” says Mayor Bernero.
So what’s happening to make sure the city does have the money when it’s needed?
“The number of employees in the city right now that are employed, about 700, the number of retirees, 1,600 and going up,” says Former Lansing Mayor and Chair of the Financial Health Review Team, David Hollister.
Hollister says there is no easy answer. With people living longer lives and the rising cost of healthcare, he says, the price tag is higher than ever before.
But Hollister says the team is constantly looking at ways to pay for these projected costs, like raising taxes, or passing a bond. However those directly impacted, like firefighter, Eric Webber say, rolling the dice every day with their safety and now with their financial futures as well is making public service less appealing.
“The benefits aren’t what they used to be, so now the pool of people wanting to get into the profession is getting smaller,” says Webber.
Mayor Bernero will deliver his full budget to the city council later tonight.