Introduced by Sen. Nancy Cassis (R) on July 26, 2006, to allow a local government to borrow money to establish a fund to pay the unfunded liabilities created by employee contracts that promise government workers lifetime health care benefits after they stop working. A vote of the people would not be required to authorize the new debt, but it would be subject to a referendum if a certain number of voters signed petitions.. The local government would have to show that the borrowed money plus future "required annual contributions" (presumably employee contributions but this is not specified) would be sufficient to cover the unfunded health care liabilities. The new debt would be in the form of bonds backed by the full faith and credit of the local government. The presumption of the local governments that do this is that their fund managers could invest the borrowed money and earn more than the interest payments. Oakland County just announced a plan borrow $500 million to do this, and other local governments are investigating it.
Referred to the Senate Finance Committee on July 26, 2006.
Referred to the Senate Finance Committee on December 6, 2006.
1) Nancy, Nancy, Nancy by Anonymous Citizen on October 9, 2006 We'll do anything for that union vote now won't we?
2) Nancy, Nancy, Nancy by Anonymous Citizen on October 9, 2006 We'll do anything for that union vote now won't we?
3) I agree by Anonymous Citizen on August 3, 2006 The sums of money we're talking about are astounding! Oakland is borrowing $500 million then crossing their fingers in the hopes that their fund managers don't blow it.