2006 House Bill 6694 ↩

Senate Roll Call 985: Passed

To allow local governments to borrow money to establish a fund to cover up to 75 percent of the current unfunded actuarial liabilities created by past employee contracts that promised government workers lifetime health care coverage without setting sufficient money aside for this. 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 proceeds of the borrowed money would be invested in the same way as pension funds. Local governments would not have to reduce future health care costs before taking on this new debt, and would be allowed assume debt for this purpose up to the maximum allowed by state law, which is based on the maximum amount of property taxes they can impose. Note: The Senate defeated the bill twice, and only passed it when an Cassis and Whitmer amendment was added which eliminates a condition that a local government must "reduce" future health care costs (and liabilities), which would require greater co-pays from government employees, or going to a defined contribution plan for new employees. Instead, local governments would only have to "mitigate the increase in" health care costs.