House should heed testimony, take time with SB 1040
Reps should benefit from full slate of hearings on complex legislation
EAST LANSING, Mich., May 22, 2012 – With the House Appropriations Committee scheduled to meet again Wednesday morning regarding Senate Bill 1040, MEA is urging state representatives to proceed with caution on this complex issue that will impact the lives of tens of thousands of school employees statewide.
"While the House Appropriations Committee has replaced SB 1040 with their own substitute that removes some of the most drastic aspects of the Senate bill, this legislation still represents the most sweeping attack on school employee retirement security in history," said MEA President Steven Cook. “The Senate took it’s time in considering this complicated topic – representatives should take the same time and care in considering what they’re doing to retirement system and their constituents who participate in it.”
The committee heard powerful and compelling testimony yesterday from future teachers, current teachers and retired school employees describing the devastating effect Senate Bill 1040 would have on their lives.
Many retired teachers living on fixed incomes testifying against the doubling of their premium co-pay were outraged that the state could break the promise they had made to them after they retired. Increasing the co-pay from 10 percent to 20 percent – on top of increases in their prescription co-pays and the taxation of their pensions the Legislature enacted last year – will drive many school retirees into poverty. Currently, 39 percent of school retirees live on a pension of less than $12,000 per year.
"You made a 'contract' with me when I started teaching. I would accept modest wages in return for a decent pension and affordable health care in retirement. This legislation breaks that contract. I am asking you to honor that contract," said Barry Nobles, a retired teacher.
Current school employees would see drastic increases in their pension contribution under the proposed legislation.
"If this legislation becomes law, coupled with the new health care co-pays beginning on July 1, thousands of school support staff and younger teachers will immediately qualify for a bridge card, Michigan's version of welfare," Cook said.
Student MEA president Gary Scott testified on behalf of college students studying to be teachers. Of specific concern to prospective teachers is the total elimination of health care in retirement for teachers hired after July 1, 2012. "If you expect the best and brightest to enter a profession where you have decimated not only their rights but their health care in retirement, you are sadly mistaken," Scott said.
Shortfalls in the Michigan Public School Employee Retirement Fund (MSPERS) have been exacerbated by many of the so called "reform" measures put into place by the current legislature. Privatization of school employees, unlimited expansion of for-profit charter schools and the recently-enacted expansion of for -profit cyber schools all reduce the number of employees paying into the system.
"The problem of the unfunded liability in the school retirement system began in 1991, when the Republican politicians stopped pre funding the health care benefits of school retirees," Cook said. "You can’t 'fix' a complicated problem of this nature, which has been twenty years in the making, in a matter of just a few weeks."
Contact: Doug Pratt, MEA Director of Public Affairs, 517-896-4465