Oct. 3, 2024

LANSING, MI — Today, Governor Whitmer signed House Bill 5803 into law, a significant piece of legislation that will permanently reduce the payroll rate for school districts contributing to the Michigan Public School Employee Retirement System (MPSERS) and eliminate the 3% salary contribution required of many public school employees for retiree healthcare. The bill, introduced by Rep. Matt Koleszar (D-Plymouth), passed both chambers with bipartisan support and will provide ongoing financial relief to school districts across the state.

“This new law will put funding back into schools and is a direct investment in classrooms in every district across the state,” said Dr. Tina Kerr, Executive Director of the Michigan Association of Superintendents and Administrators (MASA). “School districts will now have more predictable funding, which will benefit students, teachers, and staff alike. We very much appreciate Rep. Koleszar for his leadership in introducing this legislation and navigating it through the process.”

The legislation reduces the MPSERS payroll rate by 5.75%, providing school districts with the ability to reallocate funds that would have otherwise gone into retirement system contributions. This will ease budget pressures, allowing districts to focus on educational resources and staff needs. Removing the 3% healthcare contribution will also put more money back into the pockets of school employees.

 “This law is a positive change for schools and educators,” said Don Wotruba, Executive Director of the Michigan Association of School Boards (MASB). “By lowering MPSERS costs, districts will be able to prioritize funding that directly impacts student learning. We are grateful to Rep. Regina Weiss (D-Royal Oak) for making this issue a priority during the most recent budget discussions and ensuring it remained at the forefront.”

“Educators across the state have worked for years under the weight of financial sacrifice," said Wendy Zdeb, Executive Director of the Michigan Association of Secondary School Principals (MASSP). "Today, we celebrate the removal of that burden. Eliminating the 3% employee contribution will make a significant difference in the lives of our school staff, and I’m grateful to the Legislature and Governor Whitmer for supporting public schools in such a meaningful way. This is a practical solution that both reduces costs for schools and increases take-home pay for school staff, something educators will certainly appreciate.”

Peter Spadafore, Executive Director of the Michigan Alliance for Student Opportunity (MASO), added, “Thanks to this legislation and the tireless efforts of our allies in the legislature, we will see significant savings allowing schools to better compete for talent and serve our kids more effectively. This will ensure that schools can invest more in resources that directly benefit students. The leadership of Rep. Koleszar, the advocacy of Rep. Weiss, and the compromise secured by Sen. Camilleri were all crucial in making these changes a reality for our communities."

With the signing of HB 5803, Michigan schools will experience long-term financial relief, providing opportunities to invest more deeply in educational resources and support for staff.