TIPTON – Teachers who are already eligible for retirement who choose to leave would receive a one-time $25,000 incentive payment under a plan announced today by State Representative Dudley Spade (D-Tipton). The proposal would allocate $250 million of money received by Michigan under the American Recovery and Reinvestment Act (ARRA) to pay for the incentive. Spade projects that the plan will generate up to 10,000 new jobs, savings for local districts, and long-term economic benefits for the state.
"This bill is good for Michigan's children, our schools, our young professionals, and our economic future," Representative Spade said. "By paying out a one-time cash retirement incentive, we are making room right here in Michigan for young teachers who would otherwise remain unemployed or leave the state to find work. This generates savings for local schools, who can save on salary costs by hiring younger teachers, and creates up to 10,000 new direct jobs, keeping Michigan's college graduates in our workforce, not North Carolina's."
In order to qualify for the incentive payment teachers must already be eligible for retirement. Under Spade's proposal, the incentive would be available to up to 10,000 teachers with priority given to those employees with the highest number of actual years of service.
Michigan received approximately $1.6 billion in State Fiscal Stabilization Fund money as part of the federal stimulus package. Of that the state is required to spend 81.8% or roughly $1.31 billion on direct K-12 and higher education expenditures, but has discretion with how it expends the remaining money. The Spade proposal uses $250 million of the remaining 18.2% to fund the incentive payments.
"Stimulus money is one-time revenue and using it to balance a budget that has recurring costs only delays tough decisions," Spade continued. "This proposal uses stimulus revenue to generate ongoing savings and long-term economic growth without recurring costs. It is a shot in the arm that will create up to 10,000 jobs and help us retain our young, talented college graduates right here in Michigan."