Previous posts here have described legislation passed by the House (House Bill 4075) and pending on the Senate floor (Senate Bill 927) to let local governments borrow to pay for retirement health insurance benefits that current and past officials have offered to local government employees.
The bills are different in one respect: The House version says, "The funding of postemployment health care benefits ... shall constitute a contract to pay the postemployment health care benefits." (Emphasis added.) The Senate bill contains just the opposite: "The funding of postemployment health care benefits ... shall not constitute a contract." (Emphasis added.)
Implicit in both versions is recognition that under current law there is no contractual obligation to pay, and as explained in a previous post, that "shall not constitute a contract" phrase is essentially weasel words, intended in part to obscure what's really going on here, which is both Republicans and Democrats cooperating to transfer even more wealth from the people to the government class.
The phrase is just for show, because the local politicians doing the actual borrowing will almost certainly adopt other provisions to ensure that this money goes only to retired government workers' health care benefits. (Many of those local pols will also continue to cut services and pursue tax hikes to provide ever more money to pour into this black hole, all the while crying a river of tears about ongoing "budget crises.")
Nevertheless, this particular "not a contract" language is likely to become the theme of a legislative Kabuki dance, starring Senate Republicans and House Democrats, in which the former pound their chests and proclaim sanctimoniously that they will not support the measure without the provision, while the latter pretend just the opposite.
To the extent they get the chance to cover this issue, reporters will probably be drawn to the "controversy" over this detail, which seems meaningful on the surface. Unfortunately, they may miss the real import of the bills, which is more debt loaded onto taxpayers to pay for government employee benefits that appear not to be contractual, and that far exceed anything received by most private-sector workers.
In the end a bill may well pass with the Senate language, giving Republican politicians the "cover" they need to stick it to taxpayers once again, while both parties make another installment on paying off the most politically powerful special interest in the state: government employees and their unions.
They all may even get away with it, for one simple reason: No one will tell the folks back home.
(Psssst - folks back home: Are you listening?)
House roll call vote details on House Bill 4075 here.
Senate Appropriations Committee roll call vote on Senate Bill 927 (which is sponsored by Sen. Mark Jansen, R-Grand Rapids, and co-sponsored by Sens. Bill Hardiman, R-Kentwood, and Roger Kahn, R-Saginaw):
Republicans voting in favor: Jelinek, Pappageorge, Hardiman, Kahn, Cropsey, George, Jansen, Brown, McManus, Stamas.
Republicans voting against: None.
Democrats voting in favor: Barcia and Cherry.
Democrats voting against: Switalski, Anderson, Brater, Clark-Coleman and Scott
(Note: Those Democratic "no" votes in the Senate Appropriations Committee are likely the first steps of the Kabuki dance described above.)
Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.
Permission to reprint any comments below is granted only for those comments written by Mackinac Center policy staff.