Tagged: pensions

Five state lawmakers took tough questions from parents in East Grand Rapids Wednesday night. The legislative committee of the schools' PTA hosted the lawmakers; four republicans and one democrat. Hot issues included a proposed bill on cyber schools and the governor’s proposed k-12 budget for next school year.

Cyber charter schools

Last year Michigan lifted the cap on how many charter schools public universities can run. Now, there’s a bill proposed that would allow more cyber charter schools to operate.

Many parents asked the lawmakers why cyber schools get the same amount of state money per child as brick and morter ones. State Representative Peter MacGregor (R-Rockford) said cyber schools shouldn’t get as much, saying the savings should be passed on to the taxpayers. Cyber charters can be run by national for-profit companies.

Tina Murua has two kids enrolled in East Grand Rapids schools. “I fear that they’ve couched the whole thing in terms of parental choice because…who can argue with that? It’s a brilliant strategy but it was a false choice,” Murua said. She worries companies are pushing states to allow more cyber schools just to make money.  

The state senate already approved the cyber charter school bill. It passed the State House Education Committee in late February.

DETROIT (AP) - Ford Motor Co. says it will pump $3.8 billion into its global pension plans this year as it tries to get them closer to fully funding their obligations.

The company also says that it has raised the annual pay for its 16 directors by 25 percent to $250,000.

The disclosures came in Ford's annual report filed Tuesday with the U.S. Securities and Exchange Commission.

Ford says it will put $2 billion into the U.S. pension plan, make $350,000 in benefit payments and put the remaining $1.45 billion into other plans across the globe.

The report says that as of Dec. 31, the U.S. plan was $9.4 billion short of its obligations, while global plans, which include the U.S., were short by $15.4 billion.

A new report by the Michigan League for Human Services takes a look at Michigan's shifting tax policy and it's impact on low-income families.

The report shows what we already know, that businesses in Michigan will receive a tax cut in the state while individuals will pay more.

Low income families, the report's author Joanne Bump concludes, will be hit the hardest.

265 Kalamazoo City employees are eligible for the early retirement incentive. According to the city’s Human Resources Director Jerome Post, 191 of them have already signed up. “I have to admit I’m a little surprised at the number of people,” Post said the number is higher than he expected.

 “It’s been a little bit anxiety ridden for us but at the same time we’ve been very excited about the opportunity this presents for us to restructure virtually every department in the city,” Post said.

LANSING, Mich. (AP) - Organizations representing retiree groups say they want the Michigan Legislature to repeal an unpopular tax on pensions, or lawmakers will pay the political price in the 2012 election.

The AARP and groups representing public employee retirees called for a repeal Friday before the new tax plan takes effect in January.

The groups say they haven't ruled out filing suit in federal court to try and block the changes, but they are focused on getting lawmakers to take action.

When the Legislature returns to the state Capitol next week, there will be another item added to its to-do list. That is: coming up with millions of dollars to fill a budget gap created by the state Supreme Court decision on Michigan’s new pension tax. The court upheld the tax on pensions, but said denying a tax break to some higher-earners effectively created a graduated income tax.

A graduated income tax is not allowed under the state constitution. That part of the decision also blew a $60 million hole in the state budget. Sixty million dollars is a small part of a general fund budget that exceeds $8 billion.

But it is an amount the governor and the Legislature will need to make up to meet their obligation under the state constitution to have a balanced budget. One possibility would be to use a projected surplus from last year’s budget to fill the gap. That number becomes official in January. But it appears the surplus will be somewhere near $400 million.

Lawmakers are already fighting over what to do with that money. Democrats say it should be used to restore some budget cuts to schools. Republicans say it should go into the state’s “rainy day” savings fund, or to pay down debt.

The Michigan Supreme Court says a new law taxing public pensions does not violate the state Constitution. 

The advisory opinion released today is a major victory for Governor Rick Snyder, who signed the sweeping tax changes earlier this year. Employee unions were opposed to the new law.

State officials expect the law will generate as much as $330 million dollars in revenue in 2013.

The court did say a portion of the law doesn't pass muster. The court ruled the tax could not be administered as a graduated income tax, which is illegal under the state constitution. And that means Governor Rick Snyder will have to go back and find more revenue or more cuts to make sure the state budget remains balanced.

However, the Supreme Court says that does not stop the rest of the tax overhaul from taking effect.

The court divided along party lines, with the four Republican justices making up the majority.  

The decision means the new tax on pensions will take effect January first largely as it was designed by Governor Rick Snyder and the Legislature. However, they will have to come up with a plan to make up some of the money they were counting on to balance the budget.