Michigan
Rent from DeepDyve- Michigan
MICHIGAN PUBLIC SCHOOL EDUCATOR RETIREMENT SYSTEM (MPSERS) COST OFFSET
The legislature appropriated over $148 million to local school districts participating in MPSERS, based on each participating district's percentage of the total statewide payroll for participating districts across the state. These payments are for the purpose of offsetting a portion of the retirement contributions owed by the district for FY 2018.
MPSERS RETIREMENT RATE CAP COSTS
The state allocated $1.1 billion to local districts and intermediate school districts to remit to MPSERS. This funding is used to pay the difference between the uncapped MPSERS contribution rate (36.88% of payroll for MIP/Basic), and the capped rate that school employers will pay in FY 2018 (25.56% of payroll for MIP/Basic).
ADDITIONAL PAYMENT TOWARD MPSERS PENSION LIABILITIES
The state will pay $23 million to local school districts and intermediate school districts to reimburse employers for the additional defined contribution costs for new hires choosing the defined contribution plan, and for the higher hybrid defined benefit costs for new hires choosing the new hybrid.
SCHOOL READINESS GRANTS
The state provided over $240 million to improve the school readiness of at-risk four year olds.
AT-RISK PUPILS
The state appropriated over $510 million specified to implement schoolwide reform in schools with 40% or more of pupils identified as at risk. The definition of eligible pupils was changed to being economically disadvantaged, which includes those eligible for free or reduced-price meals, living in a household that [End Page 266] receives supplemental nutrition, homeless, a migrant, or in foster care.
SPECIAL EDUCATION
The state provides more than $1.3 million for special education and special education transportation.
EARLY LITERACY
The budget allocates $27.9 million to fund numerous early literacy activities. It will use $6 million to provide early literacy coaches at ISDs to assist teachers.
CAREER TECHNICAL EDUCATION/EARLY MIDDLE COLLEGES
The state provided more than $37 million for the added costs of secondary-level career and technical education programs. It allocated $8 million to increase the number of Michigan residents with high-quality degrees or credentials, and to increase the number of students who are college- and career-ready upon high school completion.
VIRTUAL EDUCATION
More than $7 million was spent to provide funding for the Michigan Virtual University to operate the Michigan Virtual Learning Institute.
SCIENCE, TECHNOLOGY, ENGINEERING, AND MATHEMATICS (STEM)
More than $12 million was provided in various capacities for the advancement of STEM education and prepare students for careers in STEM.
CHANGES TO FUNDING FORMULA FOR P-12 AND/OR HIGHER EDUCATION
The state legislature provided all school districts with a $60 to $120 per-pupil increase for FY 2018 based on the 2x model. The 2x model seeks to provide the largest per-pupil increase to the lowest funded schools and the smallest increase to the highest funded schools. For state higher education institutions, an increase of 2% or $28 million is allocated for FY 2018. The total allocation remains below the FY 2011 funding level. Michigan's 28 community colleges will receive a 1% increase, but the increase will not be divided equally among the colleges.
PRESSING STATE ISSUES AFFECTING P-12 AND/OR HIGHER EDUCATION FUNDING
Retirement System
Senate Bill 401 replaces the current school pension system with one that requires more cost-sharing by new employees, and contains provisions intended to limit [End Page 267] state management practices responsible for the $29.1 billion of unfunded liabilities in the status quo system. New employees can choose instead to receive substantial employer contributions to 401(k) accounts (4% of salary automatically, and an employer-match of up to 3% more). If the overhauled defined benefit component is not properly funded, employees who enrolled in it will have to pay half the cost of correcting this. If underfunding exceeds specified levels it will be closed to new hires.
Student Enrollment
Student enrollment continues to decline, which directly affects the amount of revenue public schools are appropriated. In FY 2015, there were 1,550,802 students, FY 2016 1,540,005 and FY 2017 1,532,335. Flat or slightly declining student enrollment is forecasted.
