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Flint gets $170M pension fund bailout in state budget

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July 1, 2022


FLINT, MI -- Flint’s pension system, an increasing drain on the city’s budget and a threat to its solvency, is getting a $170 million cash infusion from the state.

Mayor Sheldon Neeley said in a news conference on Friday, July 1, that the newly adopted state budget includes the funding that will help chip away at a $400 million liability in the pension system, bringing it closer to being funded at minimum levels set by the state.

As recently as May, Chief Financial Officer Robert Widigan had said Flint was facing insolvency without a substantial boost in revenue to help pay rising pension costs, which are projected to increase by 25 percent -- to $40 million annually in the 2024 fiscal year.

“This is going to help stabilize our structural deficit,” said Neeley, who said the city will receive more funding in the new state budget than at any time in Flint’s history.

The mayor said he and other local and state officials will discuss how that funding will be applied to lessen the city’s pension obligations in a roundtable meeting next week.

As of Dec. 31, 2020, Flint had $559 million in pension liabilities but plan assets of just $149 million, making it funded at less than 27%. The state’s minimum goal for pension systems is that they are funded at a rate of at least 60%, something Flint needs $220 million to achieve.

City officials have been working for months on a relief package from the state, and Neeley has blamed previous mayors and emergency financial managers for not having addressed the problem in a sustainable way.

As the number of retirees in the city has risen, its active employees and tax base have decreased, leaving one active employee to pay for the pension benefits of four retirees.

Flint is a member of the Municipal Employees Retirement System, or MERS, a statewide multiple-employer pension system.

In the fiscal year that started Friday, the city’s most significant expense is its retiree legacy costs, including pension expenses that have increased to $32 million. The costs had been projected to rise to $40 million in the following fiscal year.

In addition to the pension relief, the new $76 million state budget provides more than $10 million for more than a dozen community-based programs in the area, according to state Senate Minority Leader Jim Ananich, D-Flint.

The funded area programs are:

  • $3 million for the Gun Involved Violence Elimination initiative for the Genesee County Sheriff’s Office. The money will provide equipment, personnel and training focused on reducing shootings and homicides.
  • $2.5 million to redevelop the former General Motors headquarters into an inpatient behavioral health facility.
  • $1.5 million for the Hamilton Community Health Network to increase access to community-oriented health care for the underserved in the greater Flint area.
  • $1 million to continue providing no-cost, full-day, year-long early education to Flint children from birth to age 5.
  • $500,000 for Berston Field House for youth and adult recreational, educational, and civic engagement opportunities.
  • $500,000 for the Ennis Center to support its work with abused or neglected children, foster care placement and guidance for juveniles.
  • $500,000 for the Flint Children’s Museum for building developments.
  • $500,000 for the Saint Mark Community Outreach Center to support suicide awareness and youth and community outreach programs.
  • $500,000 for the Sylvester Broome Empowerment Village to develop a new facility that will offer year-round athletic programming to youth of all ages and abilities.
  • $250,00 for the Inmate Growth Naturally and Intentionally Through Education (IGNITE) for GED, skilled trade, and college-level courses for Genesee County inmates.
  • $250,000 for the Boys & Girls Club of Greater Flint for building and infrastructure improvements.
  • $250,000 for Crossover Outreach to establish a new facility for supporting residents in need of food, personal items, household items, clothes and cleaning supplies.
  • $150,000 to support the Martus-Luna Food Pantry.

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