By KYLE OLSON
It's been reassuring to see many leaders across the state, including Gov. Jennifer Granholm, coming out against the Michigan Education Association's flimsy plan to offer financial retirement incentives to older teachers.
It's obvious that the savings local schools would gain through the retirement of veteran teachers would be more than offset by increased pension and insurance costs for new retirees.
According to the Michigan Senate Fiscal Agency, the plan would result in $127 million to $595 million in extra costs to schools per year. The plan is expected to go before the Senate Education Committee, where it will hopefully suffer the quick death that it deserves.
But it was still nice to hear the MEA acknowledge that our state's public schools are in a financial bind. And there is one simple way the union could help address that problem.
The MEA could voluntarily surrender some of the $350 million it has shamefully amassed in Michigan tax dollars over the years.
The MEA collected those dollars through the Michigan Education Special Services Association, better known as MESSA, a "non-profit" insurance carrier essentially owned and operated by the union.
More than half of the state's public school districts have been pressured into purchasing MESSA health coverage, for teachers and other staff during contract negotiations.
MESSA makes a lot of money, transfers millions every year to the MEA, and keeps even more of its excess earnings in "reserve accounts."
According to statements filed with the Michigan Department of Insurance, MESSA currently has approximately $350 million in net assets.
That's 350 million tax dollars that Michigan schools were overcharged for health insurance, and they deserve a refund.
The MEA and MESSA, citing the school funding crisis, should declare a "rate holiday," allowing school districts to skip paying health insurance premiums for several months.
Frank Webster, former executive director of MESSA, agrees with that concept. "MESSA has made excessive profits for several years," Webster told the Education Action Group. "These reserves should be returned to the school districts now by deferring MESSA rate billings -- a rate holiday -- until the reserves are reduced to a more reasonable level, perhaps 5 percent of annual billings.
"The money could be better used to educate our children in this tough economic climate, rather than sitting in the coffers of MESSA and the MEA," he said.
In the likelihood that the MEA ignores Webster's advice, there's still something school boards can do to save tons of cash -- dump MESSA insurance.
That's already happened in the Gaylord, Mendon, St. Clair Shores Lakeview, Pinckney, Elkton-Pigeon-Bayport, Centreville and Waterford districts, and many more are trying to follow suit.
The savings are handsome. In Waterford, for instance, the district saved $550,000 in just two months after switching to a less expensive insurance carrier.
The bottom line is that public schools are nearly broke and our children's educational opportunities are at stake. There's no more room for waste in school budgets, particularly for items like unnecessarily expensive health insurance coverage.
About the author: Kyle Olson is vice president of the Muskegon-based Education Action Group (educationactiongroup.org), a nonprofit organization that promotes spending reform in public schools.
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