The Michigan Supreme Court ruled that the state must pay about $211 million to eighty-four school districts in the Durant settlement. Governor Engler's plan includes the following:

• $230 million to "at risk" students over three years using interest from the Budget
• Stabilization Fund. This would restore the veto of $252 million in funding last summer.
• $52 million in other programs was also vetoed from the state aid bill.
• $35 million for future special education funding.
• Issue $768 million in bonds for districts that did not participate in the suit, to be used for technology and infrastructure. (Adding interest on the bonds over fifteen years could raise the debt to approximately one billion dollars.)

Before Proposal:

A the school districts paid 5% and the state government 9%.

After Proposal:

Now school districts are directly responsible for funding the retirement system and pay 15.17% of payroll.

A voluntary defined contribution plan would go into effect. Districts would contribute 4% of salary into an employee's personal pension fund. The employee could contribute 3% more, matched by the district for a maximum of 10%.

A graded insurance premium of 3% for each year of service would go into effect and the employee would be vested after 10 years.

Change the rate of assumption (% of interest) from 8% to 8.25%. School districts would have to make up the difference if investments didn't earn 8.25!

The Legislature will be working out agreements on the above and other educational matters.

I'll try to keep up!

Nancy Bielik
Legislation Chairman