Contents of this issue:

  • Pension plan too costly, administrators say
  • Health plan savings at $550,000
  • Au Gres, Arenac consider consolidation
  • Academy closes, students moved to night school
  • Schools apply for 'small schools' funding


KALAMAZOO, Mich. - Padding teacher pensions as a way to entice them to retire might save money in the short run, but not over the long haul, school administrators told The Kalamazoo Gazette.

"It's a bad proposal. From an actuarial standpoint, it's not very sound," Brad Biladeau, a policy analyst for the Michigan Association of School Administrators, told The Gazette during a recent MASA conference.

As proposed by the Michigan Education Association and a bipartisan group of lawmakers, the one-year-only plan would increase pension benefits by about a third for eligible school employees who agree to retire this year, typically those with 30 years of service, according to The Gazette.  The MEA said the plan will save districts money by replacing highly paid teachers with beginners at lower wages, The Gazette reported.

Local officials and MASA conference participants told The Gazette that any savings would be more than offset by higher pension costs. School districts this year must contribute to the statewide pension fund an amount equivalent to about 16.5 percent of their payroll, The Gazette reported. That rate already is expected to increase because of lower investment returns and higher health care costs, according to The Gazette.

"It would transfer the problem from one pocket to another, from the School Aid Fund to the retirement system," Biladeau told The Gazette.

"I'd like to see an analysis of the entire impact," Tom Noverr, assistant superintendent for operations for Portage Public Schools, told The Gazette. "I don't want to dismiss this completely, but there has to be additional costs. There has to be."

The Kalamazoo Gazette, "Michigan school officials call MEA early retirement idea 'a bad proposal,'" Jan. 31, 2009

Michigan Education Report, "It's time to get serious about school employee pension reform," Feb. 23, 2007


WATERFORD, Mich. - Waterford School District saved $550,000 in two months through a new health care plan for teachers, The Oakland Press reported, but the plan remains a sticking point in union negotiations.

The district and the teacher's union are operating under a contract extension with a new health plan in place, The Press reported. Union members are concerned that they will have to pay more out of pocket if Blue Cross and Blue Shield, the underwriter, begins to charge more for the policy, according to The Press.

"We're also waiting to get feedback from our members as to how well the new health-care plan covers their needs," Marcy Felegy, Michigan Education Association Uniserv director, told The Press.

"There has been some confusion as to how our members can adjust to the plan and we're expecting (future) rate changes."

The teachers and the district have agreed to a 2 percent to 4 percent salary increase that took effect in August 2008, the Press reported.

"The savings we achieved the first two months that (health) plan was in place was greater than we even anticipated," board trustee John Himmelspach told The Press. "I am hopeful we could save as much as $1 million over the course of a full calendar year for the district, but we're not sure what the final numbers will be. Either way it will be significant."

While the district says the health care savings made it possible to offer raises, Felegy said that the union members "bought" their raises by extending the salary schedule, The Press reported.

The Oakland Press, "Waterford teachers, board agree on extension," Jan. 27, 2009

Michigan Education Report, "Customers ask for details on potential Blue Cross hike," Jan. 20, 2009


TWINING, Mich. - About 200 people attended a community meeting to discuss combining the Arenac Eastern and Au Gres-Sims school districts into one operation, The Bay City Times reported.

Some who attended the meeting said that consolidation would be a way to continue offering a full program for students, compared to likely cuts if the districts continue to operate separately, according to The Times.

Each district anticipates enrollment declines that will mean less state revenue, The Times reported. Arenac Eastern enrollment now stands at 285 and Au Gres-Sims at 400.

"I want my kids to have the best classes available to prepare them for college," Brent Schutte, an Arenac Eastern parent, told The Times.

Consolidation would require both districts to dissolve their teaching staffs without promise of rehire, according to The Times.

"For us, it's about survival," Carla Fritz, Au Gres-Sims Middle School language arts teacher, told The Times. "It's going to get so that we can't offer the classes students need to graduate. Then what? I don't think inaction is an option."

But teacher Pam Ostrander of Arenac Eastern said teachers want to see information on all options.

"I think we can maintain for a while yet," she told The Times.

The Bay City Times, "Arenac Eastern, Au Gres-Sims begin consolidation talks," Jan. 29, 2009

Michigan Education Report, "Study: School district consolidation not a money-saver," May 24, 2007


HIGHLAND PARK, Mich. - More questions than answers remain regarding the abrupt closing of the Highland Park Career Academy to all but seniors, according to media reports. Highland Park Schools told younger students last week that they should report to night classes at Highland Park High School instead, The Detroit News reported.

The academy has 828 regular students and 146 adult students, The News reported, a combination of traditional high school students, alternative education enrollees and adults attempting to complete a diploma or vocational courses. Officials said the entire operation will close in June, according to The News.

Evening classes at Highland Park High School run from 3 to 9 p.m., according to The News, and students and parents are worried about safety. Jan Ellis, Michigan Department of Education spokeswoman, told the News that Michigan districts are authorized to close schools and to offer classes at any time.

Kary L. Moss, executive director of the American Civil Liberties Union of Michigan, said that the closing "forces the question of how far the state's obligation goes to provide education to the children," The News reported.

Superintendent Arthur Carter said that the academy was on track to overspend by $3 million against its $25 million budget this year, but details on the district's overall budget situation were inconsistent, The News reported. A state database indicates the district overall has an $111,000 deficit, Ellis told The News.

The Detroit News, "Highland Park Career Academy closing means night school for teens," Jan. 23, 2009

Michigan Education Report, "DPS enrollment down by thousands," Feb. 23, 2007


LANSING, Mich. - Thirty schools or proposed schools want to be part of Michigan's "small high school" initiative, saying they would use grant funding for such things as career academies, themed schools-within-schools or ninth grade transition programs.

The schools are competing for a piece of the $15 million 21st Century Schools Fund created by the state Legislature in 2008. 

The idea is to replace what some see as large, failing high schools with smaller learning environments that supporters hope will boost achievement and graduation rates. Only schools with graduation rates at 70 percent or lower may apply, and they are supposed to pay the money back if they don't show results within three years.

This is not Michigan's first brush with small high school models. A number of districts have received federal funding over the past 10 years for projects along the same lines, including a consortium of six in west and north Michigan, according to Michigan Education Report.

State officials say they hope to make awards in time for small school programs to open by fall 2009.

Michigan Education Report, "Schools line up for small high school funding," Feb. 4, 2009

Michigan Education Report, "Internationally known public school superintendent visits Michigan," Nov. 21, 2006

MICHIGAN EDUCATION DIGEST is a service of Michigan Education Report (http://www.educationreport.org), an online newspaper published by the Mackinac Center for Public Policy (http://www.mackinac.org), a private, nonprofit, nonpartisan research and educational institute.

Contact Managing Editor Lorie Shane at

To subscribe or unsubscribe, go to