Our report last week on the financial pressures of pensions in Grand Rapids caused quite a bit of discussion in Michigan’s second largest city, as reported by the Grand Rapids Press…
City Fiscal Director Scott Buhrer said the Center for Michigan’s study confirms the warnings he has shared with city commissioners in recent months. Future arbitration cases for police and firefighters may limit the city’s choices even more, thanks to Public Act 312, the state law that imposes binding arbitration on cities during labor disputes, Buhrer said. “In that regard, the city’s choices may be secondary to the arbitrator’s choices,” Buhrer said.
Fred LaMaire, a consultant to the Grand Rapids Police Officers Association and other police unions, said the pension benefits enjoyed by Grand Rapids police officers are not out of line with other large cities. “I don’t know of many law enforcement agencies that don’t have good pension plans,” LaMaire said. Police unions gave up pay increases when they bargained for the pension benefits, LaMaire said. “If we didn’t take those pension increases, we might be making over 100 grand a year.”
The Center incorrectly quoted an actuarial report for Grand Rapids’ general retirement system in reference to the city’s police and fire retirement system. While that error did not change the main conclusions of our report, corrected statistics regarding the number of pensioners, etc. are now in the Center’s report, which can be read here.
Our report also prompted numerous calls, emails, and letters from other communities across the state.
“Your November 11 article on Grand Rapids was illustrative of the problems outlined in my local article earlier in the week,” wrote Traverce City Commissioner Michael Gillman.
“How can it come to pass that a small city, conservatively managed, can generate an unfunded (pension) liability of $38 million, approximately $2,600 for every man, woman and child in our community?” Gillman asked in his Record-Eagle column. “The current model of defined benefit pensions in the public sector is broken… if it was ever viable.”