Michigan House Republicans
Wozniak opposes three plans that put our education system at risk and shift billions in debt to the state
RELEASE|June 26, 2024
Contact: Doug Wozniak

Over the past dozen years, Michigan has worked to pay down the significant unfunded financial obligation that exists in the Michigan Public School Employee Retirement System (MPSERS), and now the governor and Democrat members of the Legislature are seeking to divert funds earmarked to eliminate this debt and to use them for other purposes. All three of these spending plans are absurd and must not be allowed to come to fruition.

Prior to the 2012 reform of the MPSERS system, local school districts were responsible for all their own pension costs. After many years of underfunding the system, schools had amassed an unfunded obligation in the billions of dollars that was threatening their financial stability and putting the retirement of Michigan’s public school employees at risk. The state stepped in and capped the local district contribution at 20.96% just as costs would have exceeded that amount.

After more than a decade of state assistance in paying down the debt, a liability of nearly $30 billion remains and is not projected to be met until 2038. Despite this fact, there are three separate plans, currently circulating in Lansing, to divert funds from this effort and burden taxpayers with billions more in financial obligations.

The first plan is one put forth by the governor to redirect $670 million from this year’s funding to pet projects and the expansion of state government.

Plan two, in the form of Senate Bill 911 and House Bill 5803, would reduce the local district annual contribution and eliminate the 3% salary contribution by school employees, which would add more than $900 million to the state’s obligation in the next fiscal year alone and could potentially add an additional $11.12 billion to the state’s debt, according to the Reason Foundation Pension Integrity Project’s (RFPIP) modeling of MPSERS.

The third proposal is within the House School Aid Subcommittee’s proposed Education budget, which would incrementally reduce the local districts’ contribution, beginning next year, until it was eliminated, and would ultimately add an additional $26.56 billion dollar burden to the state/taxpayers, also according to the RFPIP modeling.

These plans are fiscally unsound and irresponsible. This kind of pie in the sky spending and budgetary gamesmanship is the reason our state budget has ballooned so significantly in recent years, and it must stop. We must not continue to spend as if there is no limit to burden the state and its people can tolerate.

Michigan House Republicans

© 2009 - 2024 Michigan House Republicans. All Rights Reserved.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.