Ranking the largest retiree health care unfunded liabilities in Michigan

Questions about this information? Contact us. January 26, 2016

Updated from an original article written by Eric Scorsone.

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.

This article was published by Michigan State University Extension. For more information, visit https://extension.msu.edu. To have a digest of information delivered straight to your email inbox, visit https://extension.msu.edu/newsletters. To contact an expert in your area, visit https://extension.msu.edu/experts, or call 888-MSUE4MI (888-678-3464).