A roughly 550 million dollar refund is headed back to Michigan school districts this week, but advocates say that money won’t reach school employees for at least another month.
The money was withheld from school employee salaries between 2010 and ‘12 for retirement health care, a practice later deemed unconstitutional.
Paula Herbart is with the Michigan Education Association, which sued the state on behalf of teachers. She said there needs to be oversight for the return of funds.
“One of the things that we’ve asked is that there be a master, a service master, someone in charge to make sure schools are doing it with some consistency.’
Herbart said there are bound to be mix-ups in the return of funds to some 300-thousand current and former school employees.
“There is the question of ‘I worked for a public school for one year but now I work in the private sector.’ Those will be trickier for how to contact those individuals who may not be working in a public school district anymore.”
Herbart said it still remains to be seen if the state will assign someone to oversee the refund.
A representative for the Governor’s office said courts did not prescribe a method for returning the money and each district handles taxation differently - so the state cannot prescribe guidelines either.
As it stands, individual school districts have been sent lists of current and former employees who will receive a portion of the refund.
A full statement from the governor’s office can be found below:
The courts did not prescribe guidelines or a methodology for how to return the money. Our Office of Retirement Services cannot prescribe those guidelines to districts because it varies by each district and depends on how each district has handled the taxation on that money, which is why we acted quickly to return the money so that they can begin to process the taxation. Below is a link to the FAQs that ORS has posted that I think you will find helpful.
http://www.michigan.gov/orsschools/0,4653,7-206-36609-456119--,00.html