Flint back in debt years after city leaders said it wouldn’t happen again



(The Center Square) – More than a decade after the state of Michigan took over the city of Flint due to financial debt, the city of Flint is facing the same financial problems.

The state of Michigan took over the city of Flint’s finances in December 2011 when then-Gov. Rick Snyder, a Republican, appointed an emergency manager. The state took over because Flint was in a financial mess with an underfunded pension system and debt-ridden budgets. Flint experienced a consistent deficit in the general fund as well as other budget issues and unfunded liabilities in the pension system. In June 2009, the city’s pension system was funded at 68%.

City leaders said in 2015 that the city was unlikely to repeat its financial blunders. But Flint has one of the lowest funded pension systems in the state and its general fund was in deficit last year with annual deficits projected through 2025.

The city had a balanced budget in 2015. A 2015 state report said that the City of Flint Receivership Transition Advisory Board and City Council members told state investigators that the conditions that led to the financial emergency “are not likely to be repeated.”

But eight years later, the city is back in financial stress.

The state bailed out Flint’s pension system in July of this year with a $175 million payment via the state budget. Flint is also hoping for another $50 million from a state program that pays cities with stressed pensions.

City reports say the city pension system is paying out almost $50 million a year to retirees. At the same time, employee and city contributions are only providing about $30-$35 million to the pension system a year.

The accounting firm hired by the city in 2022 called it “massive leaks in the pension system.”

The city had a general fund deficit of $3.8 million in 2021-22 and is projecting that deficit to grow to $14.3 million in 2022-23 with more million dollars deficits through 2024-25.

The city of Flint didn’t respond to emails seeking comment.

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