Oh those numbers

Municipal budgeting is a complex issue; one that doesn’t always mix well with the anonymity accorded by the Internet. 

Case in point some comments made by one “Willi the Pimp” regarding the issue of retirement incentives for city of Lansing workers. I had argued previously that giving incentives to retirees adds costs to taxpayers without any concomitant payoff in services provided.

“Willi” responded: “Don’t you ever do your homework before writing a blog or editorial? ‘So the solution is spend more money to move people into retirement where taxpayers will still pay for benefits?’ This is false! THE RETIREMENT AND HEALTH CARE HAS ALREADY BEEN PAID FOR. If people retire one they are no longer in the work force drawing from the city taxes. They are out of the budget equation. Their retirement is paid for.”

Ah, were it that easy.

Last year at this time, the City Council balanced the 2008 city budget, in part, by diverting $600,00 from pre-funding retiree health care. That’s not much, until you consider the fact that the city calculated that the gap between what the city has invested in retiree health coverage and what it’s committed to providing was, at the time, $314 million. Those were the city’s figures, provided to the LSJ.

As for pensions, there’s this little line from a FAQ sheet from the mayor’s office:

“Yes, it is solvent, but like most pension systems it is not fully funded.”

So, let’s see, the retiree health care fund is more than $300 million behind and the pension account, while solvent, is “not fully funded.”

Draw your own conclusions, taxpayers.

Comments

[JRS]

"So, let’s see, the retiree health care fund is more than $300 million behind and the pension account, while solvent, is “not fully funded.”

Draw your own conclusions, taxpayers."

My conclusion is that Lansing is
in serious economic trouble and
will be that way for a long time
to come.

[rukidding]

I would like to repeat my comment made in response to a John Schneider posting yesterday. If you think there is a problem to solve, propose some solutions.

[Stan S Shuck]

The city should be budgeting 8 million a year to fund retierments. They only put in 2.7! If they started this year and put what they need to into the fund it would take almost 40 years to catch up! The best and the brightest! PLEASE! Lansings residents should just go back to sleep, they have every thing under controll! The current budget is not ballanced and the word deficit is a spin word but is being misused. The deficit was invented with creative math example is LPD and LFD who use's over 1.5 mil a year in o.t. yet zero is budgeted! That's 3 mil. of the 6 mil.of the so called deficit right there!

[Stan S Shuck]

In addition to that there's golf and the boreshead! Last night the Question was asked why did the city offer the boreshead $200k more than the building was worth! The answer should have been that's what the building cost$900 puls thousand! But what was said was that the extra $200k was to put into an endowment fund for the arts! So right there they said it they where donating $200k for the arts! That's the facts! Creative math brought to you by the best and brightest! They have money stashed all over. Francis Park, the bath room at St. Joe Park, the Consolidated Garage fund has 11 million in it! They justified The boreshead by saying they bring in 2 mil a year from people buying dinner downtown when they see a show! How much do the thousands of golfers spend coming and going! I'm sure it's much more than that but yet we can't afford golf but we can afford theater!creative math! Even the PGA sees the ability for profit and use! Why is it the brightest and best can't see past there ego's

[Willi the Pimp]

Back in the "90s I saw figures that a worst case the city was $1,000,000,000 behind in health care funding for retirees.This was just after the infamous early out where the people that did retire got an extra 5 years AND 11%.The State Journal at the time said it was a good idea.The city never did recover from that.Remember even the infamous mayor left.And as far as it being paid yes it is paid.I worked for my whole life because of this pension and health care.We have had people come work with us "for the benefits."One was making $70,000 for a local contractor.He wanted the benefits.Now he is lucky to get $40,000.If you worked for say one week and it was contractually agreed to say $10 per hour you are owed this.Maybe Mr. Melot you should turn your sights on the reasons that the city is short on money.The reasons are many.One is all the city councils don"t have a clue what is going on at lower levels.If you have a problem with say the police talk with the chief sure,but talk with the police on the street.Another is tax abatements.Millions are given away every year.This is blackmail period.Everyone in this city thinks they know who runs this town...it is the developers.Not council and not the mayor.Oh,and to quote one of your reporters when asked why they didn"t report on corruption in city hall"I have a boss too."

[Curly Bill]

Hey rukidding, while I agree we need to focus on solutions, this is a blog. By definition, a blog is aimed to generate discussion among the people that read it. Mr. Melot offered his view of a problem with the city's finances, hopefully spurring some intelligent conversation among readers of LSJ.com. His goal (or this blog's goal) is not too fix all the world's problems.

Also, to fix a problem you first have to identify it.