Michigan teacher pensions targeted in budget talks

May 3, 2017 by

Lansing – Republican legislative leaders are gearing up for another push to close Michigan’s teacher pension system to new hires and move them to 401(k)-style retirement plans, pointing to growing unfunded liabilities of $29 billion that could drain money from classrooms despite recent reforms.

The developing proposal may quiet talk of personal income tax cuts in Lansing. House and Senate Republicans instead would use budget savings they’ve identified to help school districts pay down liabilities or cover up-front transition costs for the state, which held up action last fall on proposed reforms.

“We think there’s opportunity to help solve one of the nagging problems of growing debt for the state,” Senate Majority Leader Arlan Meekhof, R-West Olive, said Tuesday. “And this may be one of those opportunities to use that one-time money to make a down payment on that end and start moving in a direction that saves the state money over a very long time.”

Leaders entered the new budget cycle with a $330 million surplus.

House and Senate budget bills up for floor votes this week would trim at least $270 million in state spending proposed by GOP Gov. Rick Snyder for next fiscal year, an amount legislative leaders have said could be used for tax cuts, infrastructure investments or debt relief. They could also look to redirect $175 million currently planned as a deposit into the state’s “rainy day” savings fund.

Source: Michigan teacher pensions targeted in budget talks

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