Votes coming on Michigan school retirement plan
By TIM MARTIN, Associated Press Writer
LANSING, May 14, 2010 (AP): Michigan lawmakers are getting ready to render what may be the final verdict Friday on a plan aimed at prompting thousands of public school employees to retire this summer.
Leaders in the Republican-led Senate and Democrat-led House reached an agreement in principle Thursday that would slightly increase pension benefits for eligible school employees to retire this summer. Remaining employees would be required to pay an additional 3 percent of their salaries into retiree health plans starting in July, according to the final version of a compromise bill reported to the House and Senate by a bipartisan committee.
It wasn't clear if there were enough votes to pass the bill in a relatively rare middle-of-the night session of the Michigan Legislature.
The Michigan Education Association, the state's largest teachers union, opposes the compromise and was urging its members to contact lawmakers.
More than 50,000 school employees statewide could be eligible for the sweetened retirement benefits, although lawmakers guess only about half of them might take the incentive.
A retirement incentive plan might allow schools to avoid layoffs or save money by replacing older workers with younger, lower-paid employees. Schools also would save money because employees would be responsible for more retirement system costs.
Those savings would offset likely cuts in state aid made to schools on a per-student basis. There's a projected deficit of more than $400 million in the state's school aid fund for the fiscal year starting Oct. 1, meaning schools could lose more than $200 per student from this year's levels.
Supporters of the plan say it could save schools between $600 million and $700 million in the fiscal year starting Oct. 1.
Lawmakers hoped to complete a plan last month. Schools say a plan must be done as soon as possible so they have time to make employment decisions over the summer.
The school retirement legislation is Senate Bill 1227.