FLINT, Mich. – The City of Flint originally said it would receive $170 million dollars to help bolster its pension fund, Wednesday Flint Mayor Sheldon Neeley announced the city will be receiving $220 million instead.
The money is coming from the State of Michigan and it said to be going directly to the city's pension plans. Michigan legislature finalized a $76 billion budget plan this week that Governor Whitmer is expected to sign.
The city says this news makes sure the city's pension will remain funded for generations to come.
There are some key factors about this funding. The first thing is that the city won't actually receive these funds until August of 2023 and while these funds are helping the city drastically, they do not completely take care of the city's pension plans.
Before these funds were announced, Mayor Neeley says the city's pension plans were only 26% funded through the state leaving the City of Flint to pay the remaining 74%.
With these funds, Flint now will only be paying 40% of the pension plans and what was originally thought to be $170 million has nearly doubled.
"What's coming out of Lansing, as previously reported was $170 million to go towards our pension system. It's actually $220 million," Robert Widigan, City of Flint's Chief Financial Officer said.
These funds are a result of Michigan's 2022-2023 fiscal year budget making it so all municipalities are funded to 60% in their pension plans, Flint included. State lawmakers say the idea is to give communities, like Flint, the opportunity to have better financial stability.
"The goal was to make sure retirees get their pensions and the hardworking folks and communities across the state are able to receive the basic services that municipal governments provides," John Cherry, Michigan State Representative said, "Communities throughout Genesee County will benefit. The city of Flint is the largest municipality that is going to benefit," he finished.
According to Mayor Neeley, the City of Flint currently has one working employee paying into the pension plan, for every four retirees they're paying. The Mayor says before these funds, the city was on track to bring in $56 million in revenue this year and pay out roughly $67 million with a great majority going towards pension plans. Something Mayor Neeley says was not manageable.
"Now because we have these additional dollars, we can alleviate those other obligated dollars to the pension system and then put it into circulation into the benefit of residents," Mayor Neeley said.
The City's Chief Financial Officer, Robert Widigan says with the $220 million promised from the state, the city is now looking at about a $19 million dollar pension pay out, instead of their original $40 million pay out.
City retiree's who were once fearful of what their pensions might look like, are now relieved to know that these funds are going to help.
Mayor Neeley says currently the city still does pension plans but employees are required to pay a higher percentage into them, along with other changes. As for retention, Widigan says they are required to check in with the state regularly to make sure they are keeping up with requirements.