The press release below just went out to the media, after a Senate spokesperson confirmed the news to reporters.
Things we need to reinforce with members at this time:
1) This battle has been won, but this issue is not going away…we need to continue educating lawmakers for the next legislative session starting in January about the consequences of closing the pension system for new hires. But for today, THANK YOU to the thousands of people who communicated with their lawmakers about why SB 102 needed to be stopped.
2) We need to thank the lawmakers who stood with us…we’ll be sharing information on that as soon as we can.
3) Lame duck isn’t over with! The tax refund shift legislation still may move, as well as other issues. As we said in Capitol Comments yesterday – Lame Duck Hurts Kids…and lawmakers should be encouraged to end the lame duck session without passing other legislation that could have unintended consequences for our students and schools.
MEA calls move to table school employee retirement changes ‘the right decision’
EAST LANSING — The Michigan Education Association is praising the Senate’s decision to table costly legislation that would have forced all new school employees into a defined contribution, 401(k)-style retirement plan.
“Tabling this discussion rather than ramming this legislation through is the right decision,” said MEA President Steven Cook. “Education leaders and fiscal experts agree that dismantling the school employee retirement system would have been bad for school employees, parents, kids and taxpayers.”
Contrary to claims by Republican Senate sponsors that the change would save the state money, Senate Fiscal Agency budget experts projected the change would have cost the state $1.6 to $3.8 billion over the next five years. Those increased costs could have meant a cut of $412 in the per pupil foundation allowance in the first year and over $500 per pupil in each of the next four years. Experts at the state’s Department of Technology, Management and Budget pegged the 30-year cost of closing the pension system to new hires at an extra $24 billion for taxpayers.
While the change was portrayed as only affecting new hires, closing the defined benefit plan would have put current and retired school employees’ pension security in jeopardy as well, since no new money would have been coming into system to keep it sustainable.
“The fact that many Senators in both parties recognized the high costs of this legislation and the damage those cuts could do to public schools is heartening,” Cook said. “They deserve thanks for listening to the thousands of constituents who contacted them on this issue.”