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Are Michigan's local governments crying poor but acting rich?

• May 24, 2016 at 5:00 PM

James M. Hohman wrote an opinion piece for the Mackinac Center’s blog that asserts local governments across the state shouldn’t be complaining that they need more money from the state while still handing out such luxuries as health care benefits to retirees.

“If the fiscal stress is so great, why keep doling out uncompetitive benefits?” Hohman asks.

Local governments have been saying for more than a decade that the state doesn’t fund them enough, Hohman says. However, he suggests that the local governments are operating as if their fiscal complaints are exaggerated.

“For example, providing post-retirement health care benefits to employees is an expense that should be the first to go if there is a real financial problem,” Hohman wrote. “Many local governments in Michigan pay for retired employees’ health insurance costs, a type of benefit that is rare in the private sector. Unlike pension promises, these other post-employment benefits, or OPEB, may possibly be trimmed or even rescinded later, though it may be subject to collective bargaining where it has been part of a union contract. For example, state retirees recently experienced an 11 percent cut in this benefit.”

Read the complete post: “Local governments cry poor but act rich.”

Hohman is assistant director of fiscal policy at the Mackinac Center for Public Policy. He holds a degree in economics from Northwood University in Midland.

The opinions expressed by bloggers are not necessarily shared by the Grand Haven Tribune or its employees. They are the sole opinion of the bloggers, who are not employed by or compensated by the Tribune.

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