Paying for teacher retirement

The $5.8 billion budget approved late Monday night by the Maine Legislature's Appropriations Committee does away with a provision that could have eventually complicated local school districts' efforts to balance their books.

An amendment proposed by Rep. Sawin Millett, R-Waterford, would have factored the costs of funding teacher retirement packages into the state aid intended for local schools. While the measure could have helped the state balance its accounts, funneling this $128 million through the funding formula the Maine Department of Education uses to determine districts' local aid could ultimately have shifted part of this cost to local taxpayers.

That formula -- based on the state's Essential Programs and Services calculation -- is based on districts charging almost 50 percent of education costs to local property taxpayers.

The funding change wouldn't have happened immediately, letting the districts off the hook for the 2009-10 budget year. It would have taken effect in time for the 2010-11 academic year, though, just as school districts would be contemplating how to use their last bursts of federal economic stimulus fund. In other words, it would have been a tough hit to take at a tough time.

While the idea might not have survived this session of budget negotiations, don't count on it disappearing. Appropriations Committee members, according to the Maine School Management Association, approved a provision calling for a study on the best ways for the state to fund teacher retirement costs.

Here's the question a study commission will be asking:

"Which portion, if any, of the employer's share of teacher retirement costs, including the normal cost component and the unfunded actuarial liability that is currently funded by the State, should be included as part of the total state and local cost of essential programs and services and which portion, if any, should be funded through the Teacher Retirement program account within the Department of Education."