Ranking the largest retiree health care unfunded liabilities in Michigan

The top 20 unfunded liabilities across cities, villages and townships in Michigan.

There are more than $10 billion in unfunded retiree health care liabilities that face Michigan cities, villages, townships and counties, according to a new report from the Michigan State University Extension Center for Local Government Finance and Policy.

The report, titled “Legacy Costs facing Michigan Municipalities” is an update to a 2013 report and features the latest data, analyses of methods to reduce health care and pension liability and detailed county information.

Authors of the report used public data from every municipality in Michigan, and if interested in where your municipality stands, you can reach out to the MSU Extension Center for Local Government Finance and Policy.

The following table is a ranking of the top 20 unfunded liabilities across cities, villages and townships.

Table 1: Ranking of the top twenty unfunded liabilities of retiree health care plans for Michigan cities, villages and townships (based on 2014 data).

Rank

Jurisdiction

 Unfunded liability*

Population

Per capita liability

1

City of Lansing

 431,776,738

 114,620

 3,767

2

City of Warren

 275,148,754

 135,099

 2,037

3

City of Flint

 240,525,197

 99,002

 2,429

4

City of Taylor

 232,697,568

 61,594

 3,778

5

City of Westland

 235,582,416

 82,314

 2,862

6

City of Saginaw

 220,255,745

 49,844

 4,419

7

City of Pontiac

 190,900,687

 59,808

 3,192

8

City of Kalamazoo

 190,631,174

 75,922

 2,511

9

City of Dearborn

 181,847,229

 95,535

 1,903

10

City of Ann Arbor

 162,200,000

 117,700

 1,378

11

City of Dearborn Heights

 162,373,460

 56,415

 2,878

12

Waterford Charter Township

 158,418,526

 73,139

 2,166

13

Bloomfield Charter Township

 143,463,873

 41,967

 3,418

14

City of Garden City

 138,397,105

 27,052

 5,116

15

City of Grand Rapids

 135,541,000

 193,727

 700

16

City of St. Clair Shores

 131,225,636

 60,036

 2,186

17

City of Sterling Heights

 128,349,484

 131,741

 974

18

City of Royal Oak

 113,165,633

 59,069

 1,916

19

City of Oak Park

 103,902,000

 29,834

 3,483

20

City of Livonia

 103,696,000

 94,958

 1,092

 

Total

 3,680,098,225

 1,659,376

 2,218

*Pertains to retiree health care unfunded liability only. 

The legacy cost report mentions some of the challenges in addressing these issues. County governments also face some of these issues. The following table provides a ranking of the top ten counties in terms of unfunded retiree health care plans.

Table 2: Ranking of top ten county unfunded retiree health care liabilities. (2014)

Rank

Jurisdiction

 Unfunded liability

Population

Per capita

1

Wayne

 1,322,567,000

 1,764,804

 749

2

Genesee

 302,674,322

 412,895

 636

3

Macomb

 262,636,883

 860,112

 164

4

Jackson

 140,904,728

 159,741

 882

5

Saginaw

 136,190,004

 195,012

 698

6

Washtenaw

 123,240,425

 356,874

 345

7

Monroe

 122,196,912

 149,824

 816

8

St. Clair

 90,378,936

 160,078

 565

9

Ingham

 83,020,997

 284,582

 292

10

Kalamazoo

 81,215,921

 258,818

 314

 

Total

 2,665,026,128

 4,602,740

 579

Due to their larger geography, county governments have smaller per capita figures than cities and townships. This advantage may be offset to some extent by the typically lower per capita revenue of county governments as well. It should be noted that according to an article published by MLive, Wayne County government has addressed their issues to some extent and will result in a large reduction in their estimated unfunded liability in the coming years. It was stated, in an article by the Detroit Free Press, that in some cases retirees are not happy with the changes that have been imposed. This illustrates the challenges as Michigan’s local governments attempt to balance promised employee benefits with the need to address fiscal distress.

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