Lincoln schools are adding a language immersion magnet. In this environment of cuts. Because it will be good for the district, bring families in, increase achievement. AAPS could totally do this, it would be a great idea.

The big changes from the original version (on which we testified: [link]) is that they did not increase the age to qualify for health benefits, but they did change all new employees to a fully DC (401k/403b-style) plan rather than a hybrid plan that has been in effect since 2010. What is perhaps most notable is that the DC plan would include a 4% employer contribution plus up to 3% matching contribution (for a total of 7% employer and 3% employee contributions. These amounts would be MAXIMUMS, with lower amounts apparently permissible. (Compare that to the 2:1 matching, 10%-5%, offered to UM staff members.) Employers will also make up to a further 2% contribution in lieu of retirement health care coverage (which will end).

On the one hand, the immediate effect would be to reduce required school district contributions by 3.5%, or a bit more than it was expected to increase for next year. However, in the year after (FY2013-14), the required contributions would INCREASE by 4% because new employees would not be paying into the existing pension plan.

So, for AAPS, while I don’t have hard figures, I imagine that SB 1040 in its current form would save the district about $2 million for the next year. However, that savings would disappear for some time starting in FY2014. It’s possible that the legislature would absorb the additional costs of closing-out the DB pension plan, but I’m not holding my breath.

On the other hand, this is based on the Senate-passed version, and I’m hearing that the House has already proposed important changes. So, we’ll have to see.

“The House Appropriations Committee is holding a rare Monday meeting to take testimony on House Bill 1040. Committees don’t usually meet on a day when the Legislature is not in town. They must really want to move this. The meeting is set for 9 a.m. Monday May 21 in Room 352 on the 3rd Floor of the Capitol. The meeting is open to the public.”

Not “currently discussing,” matter is decided.

Steve, can you explain how the retirement bill that I understand our legislature is currently discussing would affect next year’s budget? (If I understand correctly, it’s making new teachers get a 401(k) type plan, instead of a vested retirement plan.)

Some of us who have met over the past couple of weeks (parents, students, community activists from across the alternative and comprehensive schools in A2) are trying to coordinate for next steps like the ones about which Steve and others have mentioned.

Contact me if you want to help build this. We need to meet and coordinate in-person so we can better hear each others’ positions, issues and concerns.
kulanova@gmail.com
734-330-9707

They’re anticipating a $13 million deficit for next year, based mainly on expected retirement rates and projections in health care costs. Every penny we don’t cut now (and cover from the reserve fund) will be added to that deficit next year. If we take $5 million from fund equity this year to close the gap, that means we have burned the reserve down to $9 million and will have an $18 million gap to fill next year. There is absolutely no reason to believe that school aid payments will be going up significantly anytime soon. There is also a practical limit to how many students we can attract from other districts.

We need to buy ourselves some time, and some room to maneuver. We can do that with drastic and permanent cuts to basic programming, or we can do that by providing more resources locally to our schools. Effectively, that means either or both massive private giving and/or a county enhancement millage. As I said, we are running out of options.

But part of the problem is the timing of State budget matters. We get our first peek at what kind of money is available for September in mid-January, at the Consensus Revenue Estimation Conference. That, in turn, forms the basis for the Governor’s budget proposal, usually released in early to mid-February. Then each chamber of the Legislature does its own take on the budget, which is where we are now. The May revenue estimation conference just took place, which by law sets the numbers that must be used to calculate a state budget which is not in deficit (cannot be by law). Now the school aid budget bills, which are sitting in conference committee, will be hammered out taking into account the May revenue estimates.

The point of all this is that schools don’t really have a good idea of what might happen until mid-January at the earliest. Last year, we got taken by surprise as the Governor proposed to use a school aid fund surplus to pay for community colleges and higher education rather than avoid a cut to schools. That happened in February, and it was a while before it was clear that the Legislature was going to go along with it.

It is past time to look at local options. Other communities, both here and in other states, look to raising significant amounts of money through private giving to their local educational foundations. It’s time we did the same. Second, a county-wide enhancement millage is the only path we have to raise operating funds without begging Lansing. We need to seriously consider giving this another shot. We are running out of options.