News Story

Warren Council Votes Self Free Lifetime Health Care; $228 Million Short On Workers’ Benefits

Unfunded liability for promised retiree health care benefits is double city’s annual revenue

Even as the city of Warren was projecting a $228 million shortfall in funding healthcare promises to its retirees, members of the city council voted to give themselves and their dependents lifetime health insurance and dental benefits at no cost to themselves.

The Macomb Daily reported in September that members of the city council unanimously approved the deal. To be eligible, the person must have served at least eight years in office. As reported by the publication, “Lifetime health insurance coverage normally is provided to employees who work for the city for a quarter-century.”

The city has a $228 million unfunded liability for health insurance benefits it has promised to retirees. To put that liability in perspective, the city’s entire general fund budget for 2020 was budgeted at $115.8 million. Additionally, the city owes $178 million for unfunded liabilities in its employee pension system, which only has 75% of the amount actuaries say is needed to cover future retiree benefits.

“What the Warren City Council did should be an illegal act,” said Leon Drolet, a Macomb County Commissioner. “What makes me angry is what they did appears to be legal. Politicians make the laws they live by.”

Drolet said taxpayers should feel outrage at the costly benefits, especially since the city already has a large shortfall in meeting its obligations to its retirees.

“In every conceivable way the taxpayers in the city of Warren have been disrespected and taken advantage of,” Drolet said.

Emails seeking comment sent to the Warren mayor and city council were not returned.

City council members Cecil St. Pierre, Kelly Colegio, Robert Boccomino, Keith Sadowski, Scott Stevens, Steven Warner and Ronald Papandrea voted for the lifetime health care deal, according to The Detroit News. Only Papandrea is returning to his seat.

Warren Mayor Jim Fouts said the city council didn’t notify him about voting for the lifetime benefits for themselves or he could have vetoed it, according to WXYZ.

“There’s a 72-hour window period at which I can veto and apparently they want to make it veto proof, so I was not informed until way after that time,” Fouts said, according to WXYZ.

But the new city council president says the health care plan was presented to the city’s administration.

“Everything that was voted on was printed out and sent to the administration,” said City Council President Pat Green, according to WXYZ. “For them to say they were unaware begs the question of why it wasn’t taken care of.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.