24.46% of Michigan Teacher Payroll Dollars Fund Retirement (2011), growing to 35% in Subsequent Years

Lori Higgins, via a kind Brian S. Hall email

School districts crushed by surging retirement costs could save as much as $250 million this school year under a contentious bill that would make retirement benefits more expensive for public school employees but give districts millions they could use to decrease class size, restore cut programs or squirrel away more money for emergencies.
On Wednesday, the state Senate is expected to take up the bill — backed by Gov. Rick Snyder — that would require current and retired school employees to dig deeper into their pockets to keep their benefits. Some employees would get reduced benefits.
Supporters say the bill, already approved by the House by a 57-47 vote largely along party lines, would help address a $45-billion unfunded liability in the Michigan Public School Employees Retirement System. Some Republicans believe it doesn’t go far enough — they want to end the pension system altogether for new employees, an extremely costly option the Snyder administration wants to study more.
The bill is hotly opposed by groups representing current and retired school employees.

Related: Ripon Superintendent Richard Zimman in a 2009 speech to the Madison Rotary Club:

“Beware of legacy practices (most of what we do every day is the maintenance of the status quo), @12:40 minutes into the talk – the very public institutions intended for student learning has become focused instead on adult employment. I say that as an employee. Adult practices and attitudes have become embedded in organizational culture governed by strict regulations and union contracts that dictate most of what occurs inside schools today. Any impetus to change direction or structure is met with swift and stiff resistance. It’s as if we are stuck in a time warp keeping a 19th century school model on life support in an attempt to meet 21st century demands.” Zimman went on to discuss the Wisconsin DPI’s vigorous enforcement of teacher licensing practices and provided some unfortunate math & science teacher examples (including the “impossibility” of meeting the demand for such teachers (about 14 minutes)). He further cited exploding teacher salary, benefit and retiree costs eating instructional dollars (“Similar to GM”; “worry” about the children given this situation).

  • william p. rowe

    Michigans unfunded liability is due to not funding it in the past,thats why its called an unfunded liabilty.We like the Greeks,are not paying our bills. Our governors and legislators have spent money for various services such as public schools and not paid for them.We have been doing this in Washington and in our States.Its easier to take money from retirees,cops,fireman,teachers than to fund programs that our elected representatives agreed to fund then left unfunded.We have lost up to 40% of our middle class by sending jobs overseas,privatizing etc.