Some Michigan school districts are talking about how hard it will be to make cuts to accommodate Gov. Rick Snyder’s proposed $300 per pupil cut. But the state Legislature may help pave the way for a majority of the reduction in many of those districts.
Senate Bill 7, introduced by Sen. Mark Jansen, would require that all public employees pay at least 20 percent of the overall cost of purchasing health insurance. In Michigan, private-sector employees pay an average of 21 percent of their health care premium costs, according to a Kaiser Family Foundation survey.
For school districts that pay 100 percent of the premiums for their teachers’ health insurance, like Saline and East Lansing, this would raise the employee contribution from 0 to 20 percent on one of their largest expenditures. It would take much of the sting out of Gov. Snyder’s proposed cuts.
Saline paid $5.75 million for employee health insurance in 2009, according to the Michigan Department of Education. A 20 percent cut would mean $1.1 million in savings, or about $215 per pupil.
East Lansing paid $3.74 million for employee health insurance in 2009. As with Saline, bumping the teacher contribution rate from 0 to 20 percent would save $748,000, or $215 per pupil.
Snyder proposes cutting $300 per-pupil. There’s an additional $170 per-pupil cut that was made last year by then-Gov. Jennifer Granholm and the Legislature. But the actual magnitude of that cut was not felt, because federal dollars were spent to cover it up. Because the federal dollars were used up, schools are now fully exposed to the $170 per pupil cut that was made last year.
Because of this, Mackinac Center for Public Policy Education Director Michael Van Beek says that an argument can be made that school districts should never have expected the $170 per-pupil cut from the Granholm-era to be reversed. So a 20 percent contribution by all public school employees would go a long way to soften the blow of Snyder’s $300 per pupil cut.
“That’s what we are saying to people,” said Sen. Jansen, R-Gaines Township, who sponsored the bill. “If this goes through, they (the school districts) are looking at pretty close to a very small cut. … And this (savings) is long term. This is for years into the future. It’s not a one-time (cost-cutting) deal.”
Jansen said he expects a vote on the bill sometime shortly after the Easter holiday.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.