State Rep. Howrylak Explains Why He Believes Charters Should Pay Into Public School Pension System

Editor's note: State Rep. Martin Howrylak, R-Troy, offered an amendment to a bill that was defeated. The amendment would have had charter schools contributing to the public school employees pension fund if they accept county millage tax revenues. He offered his rationale below for why charters should contribute despite not having many employees enrolled in the pension plan:

There is a legacy cost problem in our state’s public education system. It is a result of underfunding pension and other post-employment benefits (OPEB). That cost is a sunk cost. In other words, the liability is a result of past actions. There is nothing we can do to reduce the liability except to pay it down and hopefully get a good return on the investment on the investment pool that is set aside to fund pensions and OPEB.

These are legacy costs and they mostly pre-date the establishment of charter schools. When charter schools began to be created in our state, and especially when the charter school cap was removed, it was agreed that the legacy costs would be attached to “traditional” public schools. In exchange for this agreement, all additional tax revenues would go to the “traditional” public schools.

Now we are effectively chipping away at and abrogating that agreement. SB 574 is just one example of this. My answer to this issue is to assess legacy costs across the entire public school funding system. Therefore all public school money, whether it be routed to “traditional” public schools or charter public schools, should be a source of funding to pay down legacy costs. Assign legacy costs fairly and equitably across the entire public school funding model, including charter schools. If you do this, then you can understandably also share in the additional property tax revenue that is provided by way of the ISD mill levy.

My amendment would have required that legacy costs be shared equitably between “traditional” public schools and charter schools in return for the allocation of additional property tax monies to these charter schools. If there is going to be no distinction between charter and “traditional” schools with respect to property tax revenue, then there should likewise be no distinction between who has to pay down the legacy costs. These legacy costs are a burden on the entire public school model.