Budget Talks Move Forward - MPSERS Funding Remains Stable
The Michigan Legislature is in the middle of budget season, and there’s some reassuring news for school retirees: all three budget proposals maintain current MPSERS funding levels.
The Michigan House passed budget proposals last week for FY 2026-2027 – a general omnibus budget in HB 5619, and an education omnibus budget in HB 5630. The Senate is expected to follow with its own version this week. (Senate Appropriations Committee’s School Aid budget recommendation.)
From there, the two chambers will negotiate a final agreement. All three versions — from the Governor, the House, and the Senate — include a 2.5% per-pupil foundation allowance increase, bringing the base to $10,300.
The Senate budget also proposes drawing an additional $500 million from School Aid reserve funds — money set aside as a financial cushion for education spending. Tapping those reserves isn’t unusual, but it’s a development MARSP will keep an eye on as negotiations continue.
What It Means for Retirees Today
The most direct takeaway for retirees and those approaching retirement is MPSERS funding remains consistent with previous years. The current framework for paying down pension debt remains intact.
MARSP will continue tracking how the final numbers come together.
Future Retirees: A strong retirement system depends on employee retention. All three budgets continue the MI Future Educator Fellowship, which helps recruit new teachers into the profession — and into MPSERS.
Monitoring Property Tax Reform Discussions
House Republicans have introduced a broad package (House Bills 5873–5880) that would reduce property taxes by $5 billion annually statewide, with the lost revenue offset by expanding Michigan’s 6% sales tax to include certain luxury services.
Governor Whitmer and Senate leaders have also called for property tax relief, though they favor a more targeted approach through expanding existing tax credits rather than a sweeping overhaul. No final decisions have been made, and these proposals are still early in the process.
Property taxes are a significant source of school funding in Michigan. MARSP will monitor discussions as they develop.
What's Next
Both chambers are moving at a faster pace than last year, and there’s cautious optimism that a final budget could be in place by the July 1 deadline. MARSP will continue monitoring MPSERS-related developments and any proposals that could affect retiree finances as negotiations move forward.
