Grand Rapids Reporter

A director at a nonprofit research and educational institute that advocates for limited government and free markets believes that Michigan’s progress on addressing pension debt could take years.

James Hohman, director of fiscal policy at the Mackinac Center for Public Policy, according to the center’s website, said in a Nov. 5 blog post that Michigan is heading towards getting out of pension debt through “putting more cash into the system,” “using assumptions about investment returns” and “limiting the ability to rack up new debts.”

Taxpayers owe over “$50 billion to state-run pension systems, Hohman said in his blog post.

“Taxpayers still need to put $33.8 billion more into the state-managed school pension system, $6.5 billion more into the state employee pension system, and another $10.8 billion in all of the local government systems,” Hohman said in his blog post.

The Michigan state lawmakers “put $1.9 billion more last year into the state’s pension systems than they did a decade ago,” tightened “assumptions about existing debt” by assuming a 6.8% return on pension investments, and “worked to contain debt,” by limiting “the ability to promise benefits now and pay for them later,” Hohman said.

Public officials set aside money for payment of government employees’ pensions, Hohman said.

“Public officials set money aside to pay for benefits as employees earn them, and adjust how much they put in the pension system based on projections made by actuaries,” Hohman said.

“We entrust pension managers to invest the money in the market and then pay the pension each employee earns.”

Hohman, who has an economics degree from Northwood University in Midland, Michigan, is director of fiscal policy at the Mackinac Center for Public Policy, which challenges “government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams,” said its website.