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Jenison’s money woes garner attention from national television news

Tue., March 7, 2006

A West Michigan school district made headlines late last year when it was featured on national news as an example of how escalating teacher pension costs are hurting public schools.

Jenison Public Schools, in Ottawa County, was featured on the Nov. 21, 2005 NBC Nightly News. During the telecast, Superintendent Tom TenBrink said the district could very well run out of money and go bankrupt. TenBrink told Michigan Education Report the condition of his district is not out of the ordinary.

"We’re not the Lone Ranger, going through this by ourselves," he said. "Everyone is experiencing the same difficulties; it’s just that I’ve decided to be more public about it."

Jenison, a district of about 4,700 students, has a $42 million budget. It gets $30 million of that from the state of Michigan, with the rest coming from federal and local sources.

Pension problems in Michigan schools stem from state law that gives teachers a defined benefit plan, whereby school districts put a certain percentage of a teacher’s salary into the Michigan Public School Employees Retirement System and guarantee future payments to retirees. House Bill 4947 would move teachers toward a 401(k)-style plan, also called a defined contribution plan.

"In the last three years, the pension contribution amount has increased from 12.99 percent to 14.87 percent (of teacher salaries)," TenBrink said. "Now they’re saying it’s going up to 16.34 percent. That eats up the foundation allowance."

Public schools in Michigan this year received a $175 increase in the per pupil state aid, also known as the foundation allowance. The minimum guarantee now is $6,875 per student.

"The increase in pension is about $120 of that amount, right out the back door," TenBrink said. "So you can’t really equate that $175 with new money."

TenBrink also said pension costs are not the only culprit leading to the financial problems in his district and many others. Health care costs also have skyrocketed. Many place part, if not all, of the blame on the Michigan Education Special Services Association, a third-party insurance administrator affiliated with the Michigan Education Association. A package of bills in the Michigan Legislature would attempt to reduce those costs, by as much as $150 million the first year according to some estimates, by allowing school districts to access claims data. MESSA frequently refuses to release that information to districts, making it nearly impossible for boards of education to compare prices against other insurance plans.

"It’s very frustrating," TenBrink said. "We can’t compare apples to apples because we can’t get any data from MESSA. Our hands are very much tied from looking anywhere else."

As for the various bills in both the Michigan House and Senate, TenBrink is all for them.

"Anything would help at this point," he said. "We’re looking at a $3 million deficit for next year."

TenBrink did point out that the teachers union in his district did agree to a less-expensive version of insurance through MESSA, reducing costs by about $400,000.

"To their credit, they went against the norm," he said. "It’s a start."

Administrators and support personnel in the district, however, are part of a pool of Ottawa and Kent county area school districts that have joined together for insurance needs. They hope to reduce costs by looking at competitive alternatives.

TenBrink said health care for retirees has also become a budget problem. He pointed to a study done by the Citizens Research Council of Michigan, which said retiree health care is draining resources from classrooms.

"Funding pension and health care benefits by the Michigan Public School Employees Retirement System will constitute an increasing burden on state finances in coming years," the Council said in a 2004 report. TenBrink said part-time school employees, who are not eligible for health insurance while working, become fully vested in MPSERS after 10 years of service and qualify for full retiree health care.

In recent years, Jenison has reduced expenditures by $4.1 million, cut 33 teaching positions by attrition, cut three administrative positions and another 30 support staff.

"We still had to use $2 million from our fund equity this year to balance the budget," TenBrink said. "It’s down to about 6 percent, whereas it should be at about 15 percent."

Not far from Jenison, the Bloomingdale Public School District in Van Buren County recently voted to privatize its janitorial services, a move expected to reduce costs by as much $80,000 in the first year. Coincidentally, they hired a firm from Jenison to do the work.

"This is a widespread problem with a lot of different situations," Bloomingdale Superintendent Dale Schreuder said. "Health care, pensions, utility costs. It’s hitting schools, industry, everything."

Schreuder said privatizing janitorial services is just another step in a series of moves to find dollars to pay for pension and health care benefits.

"We’ve taken small steps along the way," he said. "We’ve laid off administrators and paraprofessionals, reduced the number of field trips and cut teaching materials and supplies."

TenBrink said he’s been in touch with legislators about the financial problems, both before and since the NBC story.

"This is real," he said. "This is not just us saying ‘give us more money’ again. If they want to talk about keeping and attracting new business, we need good schools."

Michigan Education Daily
"Some parents who attended a South Redford School District forum recently called on teachers to make wage or benefit concessions as a way to protect school programs." >>
"An ambitious proposal to overhaul Detroit Public Schools ran into opposition Thursday over the issue of dissolving the school board and allowing Mayor Dave Bing to take charge." >>
"At least 14 public school districts in the Muskegon area offer some type of alternative education, either on their own or through a consortium, but the programs are under both budget and academic pressure." >>
"Michigan voters may see a ballot initiative in August asking them to approve a sales tax on services, with the understanding that their approval would also mean education spending reform, the chairman of the House Education Committee said Wednesday." >>
"All Flint Community Schools administrators, including members of the superintendent's cabinet, are likely to receive layoff notices this spring, though the majority could be back next year." >>
"Sara McLaren is taking a once-in-a-decade opportunity to tie the U.S. Census directly to her civics and social studies curriculum at Niles High School." >>
"Research done by the dean of the University of Michigan school of education was featured at length in a New York Times magazine article recently about training effective teachers." >>
User Comments
Is it true that young ones today are losing interest on these subjects? Obviously, the White House is promoting programs that will help students on coping up with math and science subjects. But, The federal government thinks that the quality of math and science education can repair credit with the scientific community and improve US education with a few <a rev="vote for" title="U.S. Government Spends $250 Million on Science and Math" href="http://personalmoneystore.com/Payday-Loans/ ">payday loans</a> of sorts. In reality, it will take far longer to accomplish than they might think – US educators can't even get students to accept that "irregardless" isn't a word, and the difference between their, they're, and there – our students can't even learn their own language! It's a noble aim, to be sure, but throwing money at it may not work in the long run. >>
I am a teacher in the same county who is presently trying to quit the union. Like Caldwell, I strongly disagree with the MEA.

This article was timely.

Rob Olson
Pittsford Area Schools

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I agree this is a change worth making. I describe some of the uneven effects of the idea on my blog at http://rickolson.blogspot.com/2009/08/statewide-health-insurance-plan-for.html which you may also wish to read.

The devil will be in the details, so this is one we will need to monitor closely.

Rick Olson from Saline, former school Business Manager >>

Nowadays, saving money is very crucial and properly investing the money can keep you and your family away from the effect of the financial crisis. The sad news is that a lot of the options for short term funding have been drying up. Short term funding is a necessary thing to have around, and going through traditional channels such as banks isn't an option for a lot of people anymore – basically it's only open to Ken Lewis. Installment loans are an option, but some people, including senior citizens, have been thinking about raiding their retirement fund. Getting into your pension retirement plan or 401(k) funds is the last thing you want to do if you don't qualify for any withdrawals yet. The penalties are substantial, and you'll end up needing installments loans to pay them if you use retirement funds for <a rev="vote for" title="Installment Loans Reliable Option As 401(k)s are Dwindling" href="http://personalmoneystore.com/moneyblog/2009/05/17/installment-loans-reliable-option-401ks-dwindling/">short term funding</a>.


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I AGREE >>
Godfrey-Lee on the west side of the state has been running all-day, every-day kindergarten for several years. >>
We have a problem in Detroit Public School, their system had cash flow problem for years now. And honestly it getting worst in terms in progression with more children leaving to charter their schools almost every year. The state decided to give the Detroit school districts cash advance of $70 million so they would meet the schools expenses, as well as payment for teachers. Robert Bobb, the newly appointed emergency financial manager, requested the funds early in order for him to get the house in order before he had to start panicking. President Obama has been giving out large sums of money for troubled school districts, perhaps that’s where a generous portion of the aid came from. Getting Detroit Public Schools in working order is a worthy cause.

LINK TO READ FOR MORE INFO:
http://personalmoneystore.com/moneyblog/2009/03/10/state-advance-detroit-public-schools-70m/


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I am all for school choice and think its great that charters are finally moving forward. However, I'm wondering if the research accounts for a playing field that is not level. I can't take my school buildings and move them anywhere I want, nor can I simply slap up a pole building and make it a school. If anything, public schools need less state regulation and oversight so we can play by the same minimal rules charters do. If you want public schools to compete to improve, remove the barriers to doing so. I will gladly except less funding per pupil if the playing field is level.
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The purpose is to encourage non excercising children to excercise but my daughter's highschool gave her an improper body fat percentage and made my healthy daughter who trains 20 hours a week in tap jazz and ballet believe she was overweaghit instead of a person with muscles.
I believe the public schools do not have the right to make the diagnoses with these kids because they are using one measurement and recording it from their arms that they have a certain percetnage of body fat with one arm caliper test.
Does any one have feed back?
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Specifically, 81 percent of students in religiously affiliated schools and 82 percent of students in other private schools have parents who report being "very satisfied" with their schools, compared to 55 percent of students in assigned public schools and 63 percent of students in chosen public schools.

High levels of satisfaction among private school parents also extend to opinions about their children's teachers, academic standards of the school, order and discipline at the school, the amount of homework assigned, and interactions with school personnel.

http://fitt.in >>