MSMA: Teacher retirement amendment pulled from budget

Maine School Management Association

Bulletin

May 19, 2009

Teacher retirement amendment pulled from budget

A proposal that would have moved $128 million in teacher-retirement money out of a retirement account and into GPA was pulled out of the budget Monday night by the Appropriations Committee, which decided instead to authorize a study that will look at how teacher retirement should be funded down the road.

Language that would have defined teacher retirement costs as part of the cost of education also was pulled from the budget.

The move came after the Maine School Management Association and Maine Education Association sent out alerts to their members cautioning them that the original amendment could eventually lead to shifting part of the cost of teacher retirement onto local property taxpayers. The two associations also alerted the Education Committee.

The state currently pays 100 percent of the employer’s share of teacher retirement.

The Appropriations Committee vote to pull out the most contentious parts of the proposal was unanimous.

The study language that remains asks the committee to look at:

“Which portion, if any, of the employer’s share of teacher retirement costs, including the normal cost component and the unfunded actuarial liability that is currently funded by the state, should be included as part of the total state and local cost of Essential Programs and Services and which portion, if any, should be funded through the (existing) teacher retirement program account within the Department of Education.”

School boards and superintendents are advised this study will need to be carefully monitored since this remains a very volatile issue.

The study proposal is now part of the overall biennial budget that is expected to be voted on by the full Legislature early next week.

That budget leaves in place a combination of General Purpose Aid, federal stimulus money and federal IDEA (special education) funds needed to honor funding levels outlined on 279s for fiscal year 2009-2010.