News Story

Township Board Creates New Tax Rather Than Trim 'Ridiculously Generous' Benefits

Kalamazoo Township pays 100 percent of the health care costs of its police department and also has a retirement plan that is more than twice as lucrative as the average in the private sector.

The township also recently approved a resolution to create a new tax to help pay for those benefits.

Kalamazoo Township contributed an amount equivalent to 18 and 18.5 percent of an employee’s salary into a defined-contribution system  for its police officers in 2009 and the first half of 2010. The township then switched to a defined-benefit pension plan and now contributes 15 percent.

The private sector pays on average 4 to 7 percent of an employee’s salary to retirement plans, according to a Mackinac Center 2010 study. The 37 police department employees averaged $68,368 in salary in 2010. There were seven other employees who worked 1,110 hours or less.

The township also covers the deductible on the police employees’ health care plan.

James Hohman, assistant director of fiscal policy at the Mackinac Center, called the defined-contribution plan that was stopped in 2010 “ridiculously generous” and added that the new plan that gives a monthly pension is only "marginally less" expensive.

“They really ought to ask how this is serving the taxpayers in the township,” Hohman said.

Kalamazoo Township Supervisor Terri Mellinger didn’t respond to emails seeking comment.

The township paid $10,000 to $18,000 per employee for health care premiums (not including disability, vision and life insurance) and another $3,000 to $7,400 per employee for a pension contribution in 2010, according to financial documents received in a Freedom of Information Act request.


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