Engler's New Finance Plan in Michigan Would Shift Burden of Retirement Costs

By Peter Schmidt

Taking a new tack toward resolving Michigan's long-running dispute over school-finance equity, Gov. John M. Engler has announced a plan to help close the gap between rich and poor districts by making better-off systems bear more of the burden of school-employee retirement costs.

Mr. Engler's plan, unveiled this month, calls for a shifting of $400 million currently distributed to all school districts to help cover their Social Security payments for employees.

The Social Security allocations would be consolidated into the state's main school-aid fund, which is distributed to schools according to need. Poorer districts thus would get more money, while wealthier districts stand to lose...