Freed Condemns House Bill 50545 as an “Insult” to Port Huron’s Unfunded Liability Turnaround
Port Huron City Manager James Freed is not happy with pending legislation that would bail out cities that did not deal with their unfunded liabilities, calling it an “insult” to cities like Port Huron that addressed the problem and took concessions.
House Bill 5054, which already passed in Michigan’s House of Representatives, would allocate $1.5 billion from the state treasury to hand out up to $100 million per municipality to fill in the blanks where there is no current plan to pay the contractual pensions and benefits.
Freed won an award for work that was described as “groundbreaking” to turn around the City of Port Huron’s finances to go from impending bankruptcy to having a strong plan in place to fund liabilities like employee benefits and pensions.
In his editorial that he sent to local news outlets, Freed called the legislation an “insult” and said that it is a “reward for bad behavior and failure to be good fiduciaries of taxpayer money.”
A link to Freed’s full statement can be found below.
March 9, 2022,
Dear Editor,
House Bill 5054 must be stopped in the Michigan Senate. This bill would allow the Department of Treasury to fund a $1.5 billion pension relief grant program without any real requirements…This bill is an insult to every public worker who has taken concessions, such as reduced pension benefits, in an effort to help their communities become financially stable.
This bill means municipalities who have implemented reforms and pension plan adjustments, such as bridging down the benefits, capping overtime hours in pension benefits, closing the systems to new hires and deploying a 401k-style retirement benefit, would sit by as those communities who have not acted would receive millions of dollars in unrestricted bailouts.
House Bill 5054 is a reward for bad behavior and failure to be good fiduciaries of taxpayer money. Here in Port Huron, we didn’t kick the can down the road. We are proud of the hard work we completed by working with our collective bargaining groups to implement the above reforms to our pension system.
We saved our taxpayers more than $80 million, which will be reappropriated for years to come preserving and enhancing core public services such as police, fire, and parks and recreation.
Additionally, this bill would only prop up failing systems, creating a larger problem for the next generation. The Michigan Senate now has the opportunity to send a clear message to municipal leaders across the state: if you want relief, you must reform.
Everyone supports helping municipalities struggling with the burden of unfunded liabilities, but giving grants out without any meaningful reforms in exchange for this financial assistance is a disservice to the taxpayers of Michigan.
Sincerely,
James Freed
City Manager, Port Huron, MI
Reporting for WGRT – Jennie McClelland
