CapCon Report Provokes Outrage in Norton Shores

Cities across Michigan are being suffocated by pension debt. A recent report on the issue by Michigan Capitol Confidential has motivated residents in one community to demand a fix.

Norton Shores resident Jim Riley read that his city has only 49 percent of the funds it needs to cover its obligations to current and future retirees. Concerned about the implications, Riley rallied some of his neighbors to join him at a recent city council meeting. During the public comment period, he called on city officials to address the city’s more than $20 million unfunded liability. 

Riley told the Mackinac Center’s Community Engagement Manager Anne Schieber that cities with significant unfunded liabilities have few options. “You can increase taxes, you can cut back on city services significantly, or you can attack the current union contracts and you can attack the wages of the current employees and reduce those wages and benefits.”

Schieber explained to Fox 17 News, which covered the meeting, that Norton Shores and the other 79 pension systems in Michigan that are underfunded should close their defined benefit plans to new employees. Newly hired employees, she continued, should be enrolled in defined contribution plans similar to 401(k) retirement accounts. 

Riley and another concerned resident continue to meet with city officials. They aim to encourage them to follow in the footsteps of the state’s 20 cities that have adequately funded their pension systems.