Legislators confident in early-retirement deal for teachersPublished 11:09pm Monday, May 17, 2010
By AARON MUELLER
Niles Daily Star
Before this weekend, public schools in Michigan were staring at a possible $255 per pupil cut in state aid for next school year.
But with the state House of Representatives and Senate passing a retirement incentive plan on Friday, legislators are hopeful they will be able to avoid making that cut.
Gov. Jennifer Granholm, who called the plan an “important milestone” in fixing the financial troubles of Michigan schools, is expected to sign the bill.
State Rep. Sharon Tyler, R- Niles, said the plan could save schools $650 million next fiscal year and $3.1 billion over the next decade.
But whether those number prove to be accurate depends on just how many of the 57,000 school employees eligible to retire take the bait. The projected savings were calculated assuming 50 percent of those eligible decide to retire.
Niles Community Schools currently have 48 teachers eligible to retire, nine of whom have already given notice that they will.
Superintendent Doug Law thinks the incentives will be enough to encourage “a couple” more employees at the district to retire. At Monday night’s board meeting, he said the plan will save four teaching positions out of the nine eliminated last month.
But Law also thinks the plan still might be too little, too late to reach its goal of retiring 50 percent of those eligible.
“The problem is that we’re really late in the game,” Law said. “They’ve delayed so much that I think they missed part of the opportunity to reach (enough potential retirees).”
State Rep. John Proos, R-St. Joseph, who supported the measure, believes getting 50 percent to retire is realistic, considering the governor’s initial proposal called for 65 percent.
It comes down to whether the incentives will be enough to lure those eligible into retirement.
The plan approved by the Legislature calls for the multiplier used to calculate retirement payments to be raised from 1.5 percent to 1.6 percent. A smaller pension increase, using a 1.55 multiplier, will be given to younger retirees whose age and years of service add up to at least 80.
Brandywine Community Schools recently approved its own retirement severance plan last week. No teachers in the district are currently planning to retire.
“I think that, in combination with this latest incentive from the state, I would expect that would encourage some folks to take advantage,” Superintendent John Jarpe said. “We are hopeful this will minimize layoffs.”
Brandywine already has laid off 17 teachers for the coming school year in an effort to trim $1.4 million from its budget.
Under the bill, school employees will also pay 3 percent more of their salaries into retiree health plans starting July 1 – something Jarpe was happy to see.
“There is some benefit to it,” he said. “The 3 percent, that’s going to make the system healthier, make it a little more solvent.”
State Sen. Ron Jelinek, R-Three Oaks, supported the bill, along with local representatives Tyler and Proos.
“It’s real reform,” Proos said, “with intent of making the system more solvent, stable and realistic based on costs in the marketplace.”
Tyler is hopeful the plan will allow the state to avoid the $255 per pupil cut this coming year.
“We don’t want to make that per pupil cut,” she said. “We want to get the money back to the classroom, to the student. So many families are without jobs, so we need to make sure we’re not taxing them more.”