Dexter Community Schools Could Save $2.3 Million Under Teacher Retirement Reform

A proposal to reform the funding mechanism for teacher pensions in Michigan is heading back to the Senate on Aug. 15.

Senate Majority Leader Randy Richardville, R-District 17, is “confident” the teacher pension reform bill will pass, an MLive.com article stated, after another no-vote in the Senate in July.

The bill passed 57-47 in the House of Representatives in June,  but continues to divide the Senate Republicans, according to MLive.

State Rep. Mark Ouimet, R-Scio Township, said Washtenaw County public schools located in the 52nd District could save more than $8.78 million in the next two years under the reform plan.

Saline Public Schools could save more than $3.5 million in the next two years, according to the nonpartisan House Fiscal Agency. Dexter Community Schools could save $2.3 million; Chelsea could save $1.6 million; Whitmore Lake would save $709,772; and Manchester Community Schools would save $669,925. Statewide, the savings for public school classrooms over the next two years is expected to reach more than $927 million.

"It's remarkable how tangible and immediate the savings could be for our local schools if this important reform effort is formally enacted," said Ouimet, R-Scio Township. "The growing debt associated with the school retirement system will continue to hurt our kids if we don't follow through on these reforms."

The state currently requires school districts to fund the pension system by paying a percentage of its wages—known as the MPSERS rate—back to the state. That rate, which was as low as 13 in 2003-04, has risen steadily. It was at 24.46 last year and is set to rise to 27.27 in 2012-13 unless there is reform.

The Washtenaw Alliance for Education, comprised of superintendents and school boards from the 10 Washtenaw County school districts and the Washtenaw Intermediate School District, approved a resolution urging the Legislature to give Michigan Public School Employees' Retirement System (MPSERS) reform its highest priority. 

MLive reported that the Senate was supposed to vote on the reform legislation in June. However, Richardville hasn't been able to get enough votes in favor of the bill. At issue is a portion of the compromise that would move new teachers to a 401(k) pension plan.

“I think that you can take it to the bank that this reform will be voted on on Aug. 15,” Richardville said. “I’ll stay as long as we need to to get it done on that date.”