Michigan’s school pension system has a debt problem, and its managers’ response has resembled the behavior of an out-of-control credit card junkie just one step from bankruptcy. The amounts are so huge they are hard to comprehend, so translating them into household-scale numbers helps give perspective.

Imagine if this state’s public schools were a person named Mr. Mitten who earned $20,800 in 2009, and that year also owed $12,000 in credit card debt. Mitten clearly has a serious if not yet completely unmanageable problem.

Except, in the years since, he has not managed it. Mitten keeps racking up new debt, and for seven year in a row hasn’t even made the “minimum payment” on the bills. While Mitten’s income grew slightly to $21,100 in 2016, his credit card debt also rose to $29,100, or $8,000 more than his annual income.

Multiply those figures by one million and they are almost exactly how much the Michigan K-12 school public school system takes in and owes: Annual school revenue is now $21.1 billion, up from $20.8 billion in 2009 (when it was temporarily boosted by a huge infusion of federal “stimulus” money). Over the same period, the public school system’s unfunded pension debt has risen from $12.0 billion to $29.1 billion.

Note: This example slightly overstates the pension-debt to income ratio of Michigan’s K-12 school system. That’s because a small portion of the pension obligations are owed to state university and community college employees, whose benefits are covered by other revenue sources.

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Michigan bed and breakfast David Gersenson has asked the Mackinac Center Legal Foundation to help him fight a tax for advertising he doesn't want or need.

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