School Pension Iceberg: Beware What’s Under Budget Surface

Above or below the line, pension costs come out of education budgets

Gov. Rick Snyder presented the details of his 2017-18 executive budget recommendation on Wednesday. They cover the fiscal year that begins Oct. 1.

Snyder proposes that the state directly deposit $1.1 billion to the school employees pension program known as MPSERS. That’s 7.7 percent of the $14.3 billion K-12 education budget. It’s also more than the amount proposed for special education ($954 million).

ForTheRecord Says: That budget line-item is only part of the story. The $1.1 billion does not include additional contributions that come out of school district budgets. In the 2015-16 fiscal year, districts, community colleges, state universities and individual employees will have contributed a total of $3.97 billion. Most of the annual contributions go toward catching up on the system’s $26.7 billion unfunded liability, accumulated from failing to adequately fund the system over many years.

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As part of our efforts on government transparency, we obtained data on the compensation of most public employees in the state. This information has been used to fact check claims about salaries, verify data from other open records requests, and hold government spending accountable.

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