State Rep. Joe Aragona issued a statement today following the House Democrats’ vote on Thursday to reduce contributions to the Michigan Public School Employee Retirement System.
“I miss having an accountant for a governor. Former Gov. Rick Snyder put Michigan on a path to paying off our long-term liabilities. It was a boring but financially prudent thing to do. But now that we’re finally on track to have the health care portion of our teacher retirement system fully funded, Democrats are taking the previously planned $670 million payment and diverting it elsewhere,” Aragona said.
He expressed concern over this decision, stating, “It’s a risky move. Just because we can slow down payment, that doesn’t mean we should. If the financial picture changes, we’re going to find ourselves right back in trouble. The responsible thing to do is put as much money as we can now toward paying off our liabilities, like was originally planned. And if we are able to pay things off early, that will free up more money for the classroom.”
Aragona also highlighted ongoing issues with underfunded teacher pensions: “Even once the health care portion of the retirement fund is taken care of, teacher pensions are still underfunded by $34 billion. The money should go to that.”
Reflecting on past financial challenges faced by retirees in Detroit, he warned, “It wasn’t that long ago that Detroit retirees saw their benefits cut. That is a real thing that can happen when politicians aren’t smart about saving for known future expenses like teacher retirement costs.”
