As we’ve reported, the biggest difference between the Governor, Senate and House budget proposals is the use of the savings from the school employees’ retirement system healthcare benefit unfunded liability payments. Because the health benefits portion of MPSERS is now fully funded, the Governor proposed using the $670 million that would have been used to pay its unfunded liabilities in various spots throughout the budget and the Senate followed suit.

However, MASB has been pushing for that money to be reinvested in MPSERS to lower the rate that districts have to pay into the system for the unfunded liabilities. The House budget proposal reinvests $290.8 million and lowers the rate from 20.96% to 18%. While the exact benefit to districts will vary, on average, it will free up more than $200 per pupil to invest in classrooms instead of paying MPSERS liabilities.

We have been pushing for a full 7% reduction in the rate which reflects the amount that is paid into the unfunded liabilities portion of healthcare benefits in MPSERS. This reduction, from 20.96% to 13.96%, would create significant cost savings, an average of $450 per pupil, for Michigan’s public schools without harming the MPSERS system. This financial relief is crucial, especially now that federal ESSER funds are expiring. The savings generated would guarantee the continuity of programs and services for our students and support for our staff. 

MASB joined with 12 other education organizations, including the MEA and AFT, in a formal request to the legislature and Governor to use the savings from paying off the unfunded healthcare liabilities to reinvest in the system. The letter was sent to the Governor’s Office, State Board of Education, State Budget Office and all members of the House and Senate. Your advocacy is crucial as the budgets head into final discussions. 

We urge you to contact your legislators and tell them to use the $670 million to invest back into the MPSERS system. This money should be reinvested with the districts that have borne the cost of the unfunded liabilities through the years and not spread throughout other programs in the budget. Share with your legislators what a 7% cut in your MPSERS liability would mean to your district as the funds are freed up to be spent on learning instead of retirement.