Fix the Damn Pensions!

Michigan’s roads aren’t the only thing in a state of crisis.  Here in Michigan, our public school teachers’ pension plan is currently underfunded by about $40 billion, requiring huge annual investment just to keep up and ensure teachers receive their retirement benefits.

As the public demands that every tax dollar they pay at the pump go to fund road repairs, policymakers are left with a dilemma.  Today, roughly $540 million in sales tax paid at the pump doesn’t go to roads – it goes to the school aid fund to help pay for those teacher pensions.

What’s a legislature to do?  Michigan Freedom Fund Chairman Greg McNeilly endorses one creative idea in today’s Detroit News that would better fund teachers’ retirements, while increasing investment in the roads:
“The state has a $40 billion pension liability on which it is making deposits. Bonding for $10 billion and pumping that money into the pension fund immediately increases the assets in the pension fund, and dramatically lowers payments on the remaining liability.
 
“When the state adds up the combined payments on the $10 billion bond and the $30 billion pension fund, it saves taxpayers and improves cash flow by about a billion dollars each year. It also finally puts the state on the hook requiring that it meet its obligation to our retired teachers, something that hasn’t happened before.”
As an added bonus, the plan would allow the state to reinvest that $540 million in annual sales tax payments at the gas pump directly into road repairs, while increasing school funding by over $400 million per year.
 
It’s a creative solution to a pair of serious problems.  Fix the damn roads?  Sure.  But fix the damn pensions, too.

Sincerely,
Tony Daunt
Tony Daunt
Executive Director
Michigan Freedom Fund

Gizmodo: Foxconn Plant to Open in 2020 With Fewer Jobs Than Promised
"Foxconn originally said it would build a 20-million-square-foot campus with a Gen 10.5 facility for building TV screens, and would employee 13,000 people. To try to make this pipe dream come true, then-Governor Scott Walker, a Republican, promised $4 billion in incentives. At the groundbreaking in June 2018, President Donald Trump called the plant 'the Eighth Wonder of the World.' Since then, the scope of the project has diminished significantly."
"Government shouldn't profit from its citizens' mistakes, or their misery. But Michigan counties are making out very nicely by playing 'gotcha' with taxpayers who commit errors — oftentimes very tiny ones — on their property tax payments. State law allows counties to seize property for unpaid taxes, sell it at auction and keep all of the proceeds, even if the sale amount exceeds the owner's debt."
Michigan Capitol Confidential: Not Much Difference Between Current Corporate Handouts and Recliner Subsidies
"Every session, legislators introduce bills to give certain businesses taxpayer money. Some of them pass. Regardless of which party gets tagged as the party of crony capitalism, it’s not a partisan issue. Business subsidies tend to be approved with strong bipartisan support. These corporate handouts are not that different from subsidized recliner purchases. It’s all public money going to someone’s direct private interests. Business subsidies get pocketed by business owners and serve the interests of that business owner, just as recliner subsidies would go to a person’s direct personal interests."

Join the Frontlines

Subscribe to receive email updates!