The Michigan Department of Education (MDE) advocates for all educators to be adequately compensated and respected for their professionalism (
Michigan’s Top 10 Strategic Education Plan, Guiding Principles). Funding to increase educator compensation and offset costs associated with retiree health benefits was appropriated by
Section 27l of the State School Aid Act for fiscal year 2026. Local and intermediate school districts and public school academies received these funds in the November and December 2025 State School Aid payments.
Eligible Uses
The statutory language is broad and does not specify methods for increasing compensation, such as dedicating it all to salary increases. For Office of Retirement Services reporting information of this compensation, please review
MPSERS Employer News – December 2025. Questions regarding employer taxes, FICA, and other benefit costs should be referred to districts' legal counsel or the
Office of Retirement Services. MDE cannot advise on these questions.
Eligible Populations
Eligible populations are broadly defined in the legislation. It is not confined to instructional personnel.
Section 27l(7)(a) specifies: “’Educator’ includes,
but is not limited to, teachers, librarians, speech therapists, language therapists, physical therapists, occupational therapists, school counselors, school social workers, school psychologists, school nurses, paraprofessionals aids, food service workers, custodians, bus drivers, and literacy coaches. Educator also includes any other school employee covered under a collective bargaining agreement.” (emphasis added) A district could limit it to instructional personnel, but the law does not mandate such a limit. Similarly, the law does not prohibit or obligate districts to use funds to increase compensation for school administrators or for educators who are directly employed by third party service providers.
Collective Bargaining Requirement
Section 27l(3) specifies: “If there are 1 or multiple labor unions representing educators in the district or intermediate district, the district or intermediate district shall bargain any increases in compensation … with those unions. All payments to educators made by districts or intermediate districts … shall be in addition to any existing compensation negotiated in a collective bargaining agreement.” Questions regarding whether compensation increases within existing, recently negotiated, or pending contracts should be referred to districts' and/or unions’ legal counsel. MDE cannot advise on these questions.
Timeline for Expenditures
The legislation notes that the appropriation is for the 2024-25 academic year, and any unexpended funds may be carried over into the 2025-26 academic year. As Section 18a of the State School Aid Act allows for expenditures to continue through September 30 after the fiscal year in which the funds are received, the final deadline for expending all funds is September 30, 2027.
MDE Reporting
Districts will report on uses of the funds through the Financial Information Database (FID), using grant code 274. No additional reporting will be required.
For further information, please contact
MDE-EdWorkforceGrants@Michigan.gov.
