LANSING, Mich. (AP) — A new study shows more than 300 Michigan municipalities face nearly $13 billion in unfunded liabilities to cover the cost of health care for retired public workers.
The report says cities and townships are faced with a "massive" commitment that's eating up 20 percent of their budgets. Michigan State University researchers found only half of the municipalities are prefunding retiree health care ahead of time.
The rest are setting aside no money despite longer lifespans and rapidly rising health costs.
The lead author warned a legislative committee Thursday that retiree health costs will threaten local governments' ability to provide basic services.
It's not just a problem in Detroit. He said tax increases, budget cuts or broken promises to retirees are inevitable in places like Grand Rapids, Flint, Lansing and Saginaw.
