News Story

Democrats Selectively Considering Pension Benefits In Education Funding

Pensions once 'earned in the classrooms' now excluded from funding equation by Democrats

Top Democrats are being inconsistent on whether paying for teacher retirement benefits qualifies as a classroom expense.

Their position seems to depend upon the political circumstance of the moment.

In May 2012, Robert McCann, spokesman for the Senate Democrats, criticized Republicans for asking teachers to pay more to cover their retirement costs. He said the pensions were earned by teachers with "a lifetime of hard work in the classrooms."

In 2012, Sen. Gretchen Whitmer, D-East Lansing, talked about retirement costs of teachers and described teachers as "the same people who played by the rules, negotiated for their compensation, which included retirement."

However, Democrats now claim the $404.4 million applied in 2013-14 to pay the cost of Michigan Public School Employees Retirement System benefits is not a classroom expense.

A number of notable Democrats originally claimed Gov. Rick Snyder cut funding to K-12 education. But once it was pointed out they were ignoring the $564 million in 2012-13 and 2013-14 the state paid to cover MPSERS costs, Democrats shifted to say those weren't classroom expenses. 

But a teacher's overall compensation, which includes pension benefits, most certainly is a classroom expense, said James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

"To the extent that the funding is going to catch up on underfunding, MPSERS contributions are paying for yesterday's classroom,” Hohman said. “Funding a retirement system is clearly part of an employee's compensation.”

House Democratic Leader Tim Greimel of Auburn Hills told the Associated Press that even though Gov. Snyder put more money into retirement funds, "We need more money in the classroom, where it improves the quality of student education, where it lowers class sizes."

In a Detroit Free Press article, Birmingham Public Schools Spokeswoman Marcia Wilkinson said the MPSERS contribution doesn't get to the classroom because it's "matched by a bill from the Office of Retirement Services."

Hohman said that bill from the Office of Retirement Service covers increased compensation for public school employees, including teachers, who are in the classroom.

Even representatives of the Michigan Education Association agreed in 2012 that retiree benefits were part of a teacher's overall compensation.

In 2012, Stu Skauge, the MEA's Uniserve director for Marquette and Alger counties, told a local newspaper about how retirement benefits fit in with overall compensation.

Skauge said teachers had been consistently taking lower wages so districts could offer them better retirement and health benefits. 


See also:

Like a Broken Record, MEA Complains About 'Insufficient Funds'

Pension Costs Mean Tighter Budgets For Taxpayers, Classrooms

Advocates of More Education Spending Ignoring Billions In Other Funds

The $2 Billion Education Funding Myth

Reality Check: Michigan Public Schools Getting More Money For Fewer Students

Michigan Schools Never Saw a $1 Billion Cut

Despite Fewer Students, Michigan School Funding Going Up, Up, Up

Michigan School Districts In Perpetual 'Funding Crisis'

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.