State Officials' Pension Underfunding Crushing Michigan School Budgets [Michigan Capitol Confidential]:
"In 2000, Michigan’s state-run pension system for public school employees was short $246 million of what it needed to cover future retirees’ benefit checks.
The funding gap exploded more than a hundredfold since then, reaching $26.7 billion in 2016.
The burden of catching up on this underfunded obligation is creating an ongoing budget crisis for public school districts across the state.
For example, the Ann Arbor school district was required to contribute $13.4 million to the system in 2007; by 2016 it had to pay $23.5 million, a 75 percent increase in just nine years.
Had pension costs stayed at 2007 levels, the district would have had enough money left over to give all 1,180 teachers an $8,475 bonus in 2016.
School districts across the state have experienced increases of comparable magnitudes.
James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy, did an analysis of the Michigan Public School Employees Retirement System from 2007 to 2015.
The unfunded liability grew from $5.8 billion to $26.7 billion over that time..."