Feature

Senate can’t get its act together on retirement reform

 

Sen. Phil Pavlov (R-St. Clair) and Sen. Mark Jansen (R-Grand Rapids) tried all day to convince fellow legislators that their plan to shut down the current hybrid system and put all new hires into a defined contribution plan was the logical path to reforming the retirement system.

The new plan also called for a return to retirees paying 20 percent of their premiums instead of the 10 percent the House proposed. And there was no help for paying off the system’s stranded costs caused in part by the privatization of jobs.

Their plan couldn’t get traction with legislators, but then neither did the House’s version (H-3) of SB 1040 which was defeated on a 16-22 vote. The issue now goes to a six-member conference committee appointed by Senate Majority Leader Randy Richardville and House Speaker Jase Bolger.

Every Democrat voted against the bill and was joined by Republican Senators Brandenburg, Colbeck, Hune, Jansen, Jones, Meekhof, Nofs, Pappageorge, Pavlov, and Proos.

SB 1040 rears its ugly head again

When the Legislature returns for one day on July 18, it's expected the Senate will take up the unfinished business of SB 1040. While the House passed its version of the bill, the Senate adjourned on June 14 before taking any action.

The Senate will take up the House version which includes the prefunding of the retirement system, giving new hires the option of a defined contribution plan, and a freezing of the retirement rate for school districts. All along, there have been Senators interested in forcing all new hires into a defined contribution plan, but at issue is the cost of such a move. The House version calls for a study analyzing the cost benefit.

Snyder baits school districts again with more money

The stakes are higher and the "carrot" is less enticing this year, but school districts can still get a $52 per pupil reward for completing seven out of eight of the state’s best practices. Last year, schools got $100 per pupil for jumping through Gov. Snyder’s hoops.

Many of the best practices are the same as last year and include: acting as policy holder for health care benefits; bidding at least one non-instructional service; participating in Schools of Choice; measuring student growth twice a year and reporting to parents or providing MDE with a plan for developing the technology necessary to assess student growth; providing dual enrollment; providing online or blended learning opportunities; providing a dashboard for parents and the community; and providing state Board of Education-approved physical education and health classes.

MME scores report some good news, some not-so-good news

Michigan high school students generally improved over last year in most subject areas of the Michigan Merit Exam (MME)--but if you recalculate previous scores according to our new scoring system--achievement is still low.

The state Department of Education (MDE) adopted the new scoring system in 2010 to better gauge if students are ready for college and careers. Despite the higher cut scores to determine proficiency, most high school juniors scored "proficient" in math, reading, writing and science. The MDE sees the improvement in the latest test scores as a result of the new scoring system.

Students also scored slightly better on the ACT college-entrance exam which is a part of the MME. The composite mean ACT score was 19.6 for 2012, up from 19.4 in 2011.

However, the scores do show a disturbing trend. A significant achievement gaps still exists for minority and low-income students with many leaving high school unprepared for college.

SB 1040--it's not over yet

The House passed their version of SB 1040 on June 14—the last day of session—and it was expected that the Senate would do the same. But they didn’t. They adjourned without having taken any action because they didn’t have the votes to pass it. Some Senators still oppose the House’s move to keep new hires in a hybrid pension plan. They would prefer new hires be stripped of any pension and be put into a defined contribution 401(k) plan. 

Until July 18, legislators are back in their home district talking to constituents and campaigning to save their seats. It’s a good time to make face-to-face contacts with your legislators and let them know how financially destructive SB 1040 is to current school employees, retirees and future education employees. Tell them using school employees to fix a systemic problem with the retirement system—one they didn’t create—is not fair.

Two charter school companies vie for Muskegon Heights schools

By the end of this week, Muskegon Heights Public Schools Emergency Manager Don Weatherspoon will have sold the entire school district to one of two for-profit charter school management companies—Leona Group or Mosaica Education. It’s an unprecedented move to eliminate the district’s $12.4 million debt and it signals the end to traditional public education for more than 1,400 students in Muskegon Heights.

The current school district would no longer exist, but would still have to pay off the debt using its local millage, a 3 percent fee from the charter school company, rent from its buildings and whatever other means the state Department of Education and Treasury approve. The charter school would be in charge of educating children and receive the district’s $7,397 per-pupil funding, but the school district would oversee the operations of the charter school company.

SB 1040 still in limbo; contact legislators today

With reports that sides are very close to a deal, the fate of SB 1040 is still in question with only two days left for legislators to deal with the issue. The House needs to act on the bill before the Senate can finalize it.

What to do with new hires remains a point of contention in the bill. The House Republicans want to give new employees the option of the current hybrid pension plan or a plain 401(k), while the Senate Republicans want to require that they move into a 401k only plan. Both sides agree that they want to end retiree health care for new hires.

Another major difference is the House version of the bill includes provisions to pre-fund health costs and start bringing down the $45 billion unfunded liability in the system.

With only two days left before the summer legislative break, time is running out. It’s critical that you contact your Senator and Representative today and let them know the impact this bill will have on current and retired school employees and those new to the profession.

Urge NO vote on SB 1040 in House this week

The Legislature reconvenes Tuesday for what could be its final week before their summer break and indications are that SB 1040 – the unprecedented assault on school employee retirement – will be on the agenda.

Many State Representatives are still unsure how they will vote on this bill that attacks the retirement security of future, current and retired school employees across the state.  Contact them today!  Urge them to vote NO on SB 1040.  It’s not a fix for a long-term problem—one that school employees didn’t create. It merely shifts the financial burden from school districts to current and retired school employees who are already paying more than their share.  Let them know that taxes on pensions, salary cuts and increased costs for health insurance are robbing you of the ability to support yourself and your family. 

House meets on budget today; SB 1040 still awaits action

SB 1040 saw no action in the House yesterday, but Representatives are meeting at noon today--probably to complete the budget. Regardless, we need to keep the pressure on Representatives to vote NO on the bill that puts the burden of paying for retirement on the backs of current, future and retired school employees.

 
Contact your Representative today. Let them know that taxes on pensions, salary cuts and increased costs for health insurance and retirement are robbing you of the ability to support yourself and your family. 
 
We will keep you updated on any developments.

SPECIAL LEGISLATIVE ALERT: House may take up SB 1040 today

We've gotten information that the House may be taking up SB 1040 today--the plan to gut school employee retirement. The House made several changes to the Senate version, but some of the most damaging portions are still in place, such as forcing retirees to pay 20 percent of their health care.

It's critical that you contact your Representatives and urge them to vote NO on SB 1040. It's not a fix for a long-term problem--a problem that school employees didn't create. It merely shifts the financial burden from school districts to current and retired school employees who are already paying more than their share.

 

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