If state lawmakers don’t seize the chance to reduce an ongoing burden on school districts, there could be dire consequences. That’s what some public school leaders are saying about a requirement that districts pay back a portion of their state money to fund retiree health care costs.
That part of state law is Section 147, and it requires districts to pay back a portion of their state funds every year to fund what used to be a debt in that fund. But it now has a surplus, and education leaders say the state should change the law to ease that burden.
Michael DeVault, who heads the Macomb Intermediate School District, said there’s currently another $670 million that schools could be getting. He said if the state freed that money up, it would mean an ongoing boost for school districts without raising taxes.
“It could mean as much as $500 per student on a per-pupil [basis],” DeVault said. “And we think that over time, that helps us compete for talent, [and] raise our ability to compensate everyone from bus drivers to parapros.”
Leaders say school districts could face serious cuts without that because, even with record education budgets over the past two years, funding increases haven’t kept pace with inflation.
And there’s another reason many districts are facing upcoming fiscal challenges, said Daveda Colbert, head of Wayne RESA. They face a double whammy because federal COVID relief dollars for school are about to run out.
“Those funds have now run out or they are ending as of September 2024, and schools are back to where they were without them,” Colbert said. “So now we're back to the pre-pandemic concerns.”
DeVault said that conversations with lawmakers on this subject have generated a “pretty positive response,” and that the House version of the education budget goes “part way toward our request.” Still, district leaders are trying to emphasize the urgency of the situation, calling this a once in a generation opportunity to put education funding in the state back on solid footing after decades of disinvestment.
Colbert said that if no action is taken, the consequences will be widespread. “I can attest that one out of every five districts in Wayne County will be impacted greatly,” she said. “They are nearing the financial cliff.”
