A recent court decision will return money to area teachers, while requiring districts to track down those employees no longer on their payrolls.

On Dec. 20th, the State Supreme Court ordered the state of Michigan to refund, with interest, healthcare contributions by state employees that were withheld from their paychecks between July of 2010 and September of 2012. The Supreme Court ruled that Public Act 75 of 2010, which mandated that state employees contribute 3% of their pay to the state Retiree Healthcare Fund, is unconstitutional. As a result, school districts such as Brighton will receive a refund of the funds owed with their Jan. 22nd state aid payment.

According to the Michigan State Office of Retirement Services, for the Brighton Area School District it will mean an extra $1,743,000. But that will not be money for the district to keep. Each school district will be required to disburse the money to current and former employees affected by the ruling. In addition to the 370 current employees who are affected, the district has the responsibility of finding the 443 former, or “inactive”, employees and sending them what they are owed by the state.

Assistant Superintendent of Finance Maria Gistinger told the Board of Education at its meeting this week that the Brighton Area Schools treated it at the time as a “taxable event for FICA (Social Security and Medicare taxes)….and exempted it from state and federal taxes. So (the court ruling) has no budgetary effect on us,” she said. Had Brighton not done that, she said it would have cost the district $150,000. “Some (school) districts were not so fortunate because they didn’t tax it for FICA, and now have to,” Gistinger said. She told the board that complying with the ruling “is a very daunting task” for her staff in the business and finance office, but that it must, and will, be accomplished. Gistinger said she expects the refunds to be returned to employees by the first payroll in February. (TT)