House, Senate Both Pass MPSERS Bills

Bob Kefgen's picture

UPDATE (20 June 2017): The House voted today to concur with SB 401, the version of MPSERS legislation that passed the Senate last week. The bill was passed without any changes, meaning this was the final vote needed to send the MPSERS agreement to Governor Snyder's desk for his signature. For a summary of the changes, see MASSP's earlier article.

This afternoon, the Michigan House and Senate both reported out identical versions of the MPSERS legislation (HB 4647 and SB 401) that was originally released this Tuesday. The votes were close in both chambers. In the House especially, the final tally was 55-52, with supporters garnering the bare minimum of votes necessary to pass the legislation.

Both bills have only passed a single chamber, so at least one more vote will be necessary before the legislation can move to the Governor's desk. However, since both chambers have already agreed to identical bills, it is highly unlikely that any changes will be adopted before the final vote is taken sometime next week.

The agreement reached earlier in the week between Governor Snyder and legislative leadership also included a plan for spending the $495 million that the legislature had proposed to set aside in a special account to pay for the cost of their original proposal to close the MPSERS pension system. Since the final agreement includes leaving the hybrid pension system open in some form, most of that pot of money can be reallocated. Because a final budget bill is not yet available, it remains to be seen exactly how the money will be spent, but the predominant rumor is that:

  • A portion of the funding will be set aside to pay some of the transition costs created by the MPSERS bill,
  • $200 million will be used to pay down a portion of the MPSERS unfunded liability (which, unfortunately, will have almost no impact given that the total debt is around $29 billion), and
  • The remainder of the money will be split between making a deposit in the state's Budget Stabilization Fund (a.k.a. the rainy-day fund) and spending on infrastructure improvements.

The MPSERS legislation has many nuances and will take time to fully parse. However, for members looking for an overview, the outline of major provisions in MASSP's article published earlier this week has been updated to reflect the legislation that passed both chambers and provides an accurate, if high-level, summary of the bill.

While this is disheartening news for Michigan's education system, many Principals and other educators rallied to protect public education. That hard work is reflected in today's close vote.  Thank you to each of you who called, emailed, tweeted, and engaged the legislature on this issue.