For more than two years, Troy officials have repeated the same story to residents, reporters, and firefighters.
The IRS made us do it.
The plan was illegal.
There were no other options.
Firefighters were made whole.
Every part of that story collapses when compared against the City’s own public statements, timelines, and actions.
This is not a disagreement about policy. It is a matter of demonstrable fact.
What follows is not opinion. It is a comparison of what the Mayor of Troy said publicly, and what the City knew, did, and failed to do.
1. “It was kind of news to us” vs “The IRS had been questioning the plan for several years”
Mayor Ethan Baker told Channel 7: “It was kind of news to us and we hadn’t had a chance to digest it either.”
That statement cannot be reconciled with the City’s own admissions. Multiple articles, including those quoting official City statements, say: “The IRS had been questioning the plan for several years.”
Those two statements cannot both be true.
Either:
- The City had been in an ongoing IRS dispute for years, or
- The issue was sudden and unexpected
The City itself admits the former. In fact:
- The City hired Miller Canfield tax attorneys in 2021
- The City paid IRS employment taxes in December 2022
- The City submitted an Employment Tax Changes Report
This was not “news.” This was a known, escalating issue that leadership had years to address.
Telling firefighters and residents otherwise is not spin. It is false.
2. “Mayor and council vote on it” but nothing meaningful was ever improved
Mayor Baker also said: “Mayor and council, we’re the ones who actually vote on it. I’m telling you right now there are opportunities for it to be improved and it’s going to be.”
That statement was made in January 2023. As of April 17, 2023, the plan was terminated.
Since that date:
- No replacement plan has restored lifetime benefits
- No plan has replicated prior vesting security
- No meaningful retention-based structure exists
- No fix was applied to preserve accrued expectations
There were no improvements. There was only closure, payout, and abandonment. Saying something “is going to be improved” while actively eliminating it is not leadership. It is misdirection.
3. “We’re not going to shortchange them” yet everyone was shortchanged
The Mayor promised: “We’re going to make sure the firefighters are taken care of and they’re whole. We’re not going to shortchange them in any way.”
That did not happen. Firefighters with under 10 years of service:
- Lost all future benefit security
- Had their next milestone heavily prorated
- Lost the incentive structure that justified continued service
Firefighters over 10 years:
- Lost lifetime monthly payments
- Lost predictability
- Were forced into lump sums they never planned for
Retirees:
- Had retirement planning assumptions destroyed
- Lost benefits they were explicitly told were “for life”
If firefighters were “made whole,” no one would still be angry. If they were “made whole,” retention would not have collapsed. If they were “made whole,” the City would not be hemorrhaging volunteers.
Words do not make people whole. Outcomes do.
4. “Most volunteers weren’t aware of the incentive” is plainly untrue
The Mayor claimed: “Most volunteers join the Fire Department because they want to serve their community; they aren’t even aware of the incentive.”
Every firefighter knew about the incentive plan. It was:
- Discussed openly
- Used explicitly as a retention tool
- Central to long-term service decisions
- Referred to internally as a pension-equivalent
Firefighters planned their lives around it. Retirees relied on it. New members were told about it.
Claiming otherwise minimizes firefighters’ intelligence and misrepresents reality.
5. “The city unsuccessfully challenged the IRS ruling” but no ruling has ever been produced
The City repeatedly said: “The city unsuccessfully challenged the IRS ruling.”
Then show it. To this day:
- No IRS final determination letter has been released
- No formal IRS order demanding termination has been produced
- No document exists stating “the IRS made us shut this down”
What does exist is a 2015 IRS Private Letter Ruling that:
- Does not order termination
- Does not declare the plan illegal
- Does not prohibit firefighter incentive plans
- Discusses tax timing and forfeiture risk
A challenge implies a ruling. A ruling implies documentation. Documentation has never been produced.
You cannot lose a fight that no one can see.
6. “Closing the plan was the best option” for whom?
City officials stated: “City officials determined that closing the current plan and replacing it was the best option.”
Best for whom?
Not firefighters.
Not retention.
Not public safety.
Not institutional trust.
The City chose the option that:
- Ended long-term obligations
- Shifted risk to firefighters
- Preserved budget flexibility
- Avoided redesign effort
This was not the only option. It was the most convenient option.
7. “Those firefighters mean everything to our city” but budgets tell the truth
The Mayor said: “Those firefighters mean everything to our city.”
Budgets reveal priorities. Empty words and cute postcards do not.
- Show the line items.
- Show the commitments.
- Show the replacement plan.
- Show the retention investment.
You can measure values precisely by where money goes.
8. “The IRS said we’re not going to let you do this anymore” except the IRS never said that
Mayor Baker claimed: “So the IRS said, we’ve looked into this. We’re not going to let you do this anymore.”
That statement has never been substantiated. The IRS did not say:
- The plan must be terminated
- Firefighters must be taxed immediately
- The City was prohibited from restructuring
What the IRS addressed was tax treatment under specific conditions.
- Other cities solved this.
- Clawson solved this.
- Many municipalities solved this.
Troy chose not to.
9. The false binary: tax them now or kill the plan
The Mayor presented this as fact: “Your options are to start taxing these volunteer firefighters as if they are receiving the income now when they vest, or change the plan.”
That is demonstrably false.
- Taxation before payout requires irrevocability.
- Irrevocability did not exist.
- The plan allowed forfeiture.
- The plan allowed modification.
- The plan allowed redesign.
This was not a binary choice. It was framed that way to justify a predetermined outcome.
10. “We had to spend $5 million to make them whole” but they were not made whole
The City said: “We are going to have to use all of that to pay them out, plus the City’s going to have to pay about $5 million from its general fund to make these guys and girls whole, and we have to create a new plan.”
No one was made whole. If they were:
- Firefighters would not still be speaking out
- Recruitment would not be collapsing
- Trust would not be gone
Money spent does not equal justice delivered.
The contradiction that exposes everything
The City says: “The IRS had been questioning the plan for several years.”
The Mayor says: “It was kind of news to us.”
Those statements cannot coexist. One of them is false. And once that falls apart, the rest follows.
Conclusion: This was a choice, not a mandate
The IRS did not kill Troy’s firefighter incentive plan.
City Hall did.
They chose:
- Closure over correction
- Optics over honesty
- Short-term savings over long-term safety
- Narrative control over transparency
Firefighters did not lose a benefit because the law demanded it.
They lost it because leadership decided it was easier to take it away than to fix it.
And that decision is written clearly in the City’s own words.
https://www.wxyz.com/news/city-of-troy-says-irs-is-ending-decades-old-incentive-plan-for-firefighters