The Right Struggles With Its Teacher Strike Spin

The recent school employee strikes in West Virginia, Kentucky, Oklahoma and  Arizona have invigorated progressives and increased the blue wave nightmares of the right. But Republicans have a problem: how to give in to their union-hating urges while teachers working three jobs have generated so much public support?

Not a peep on the Mackinac Center website about these job actions. But a comment from staffer Vincent Vernuccio, buried on the American Family News Network website (“presenting the day’s stories from a biblical perspective”), provides an inventive spin:

“…teacher strikes … are bubbling up because teachers feel their unions are not getting them what they want …”

This from a secretly-funded group that made neutering unions job one for the last 30 years. And the best they can come up with is the tortured logic that these are actually anti-union teacher strikes.

But this spin doesn’t stop him from putting forward a contradicting conspiracy theory that even though unions didn’t call the strikes, they called them in order to sway the Supreme Court’s deliberations in the Janus national Right to Work case. Writing in the conservative answer to the Washington Post, the Washington Examiner, Vernuccio says:

Could it be that this upheaval is a thinly veiled attempt to sway the court into accepting an argument made by a threatened union attorney during oral arguments?

It’s not at all clear what Vince means by this. It apparently has something to do with “protection money” paid by unwilling members: “agency fees are the costs employees have to pay to prevent unions from striking.”

Whatever. No doubt it’s tough to come up with an argument against teachers making less than gas station attendants.

Gas.jpg

Long-time Republican mega doner and current Secretary of Education Betsy Devos has a better idea: ignore all this and just talk about the kids.

“…we should all agree kids should not suffer for adult squabbles.”

She’s suggesting that working side jobs to pay the bills and teaching in shabby buildings with decomposing supplies doesn’t affect kids.

Okla book.jpg

Devos’ argument is not off-the-cuff; it’s textbook. Literally. It’s from the State Policy Network Messaging Guide: How to Talk About Teacher Strikes.

Oak SPN.jpg

The Guide advises its think tank members avoid sounding tone deaf, what with “dozens of videos and social media posts going viral from teachers about their second jobs, teachers having to rely on food pantries, classroom books that are falling apart, paper rationing, etc.”

Pretend none of this affects learning and just talk about the kids.

And don’t talk about school choice. After all, “teachers at choice-schools are often paid less than district school teachers.”

We’ve written before about the State Policy Network’s attempts to “defund and defang” public sector unions. The SPN is an association of right wing think tanks funded by the Devos family and staffed in part by the Mackinac Center, that helps franchise the movement and arm it in the fight to “deliver the mortal blow” against “government employee unions.”

Don’t feel comfortable attacking teachers? Attack the administrators and the bus drivers!

Bloat SPN.jpg

Advertisements

Results of the 3% Case Status Conference

Based on the results of the January 18th status conference, MEA Legal has updated its Frequently Asked Questions document.

The following are the major changes to that document:

9. What time period does the decision cover?

The money held in the escrow account, which is to be sent to the districts for distribution, is for the period of July 1, 2010 – September 3, 2012. The Supreme Court ruled the end date is when the 2012 law took effect and Judge Borello of the Court of Claims has confirmed this. For those who opted out of paying the 3% under the 2012 law because they opted out of retiree health benefits, money taken after September 3, 2012 has already been returned by deposit in the employee’s 401(k) account. For those who opted in to paying the 3% because they opted in to retiree health benefits, any money taken out after September 3, 2012 goes toward retiree health care. If retire health care is not available upon retirement, contributions paid by choice under the 2012 law will be returned as provided in PA 300.

10. Will I get a refund?

Per the Supreme Court and the Court of Appeals, the case will be remanded to the trial court “which shall direct the return of the subject funds, with interest, to the relevant employees.”

ORS has announced that reporting units will receive a transfer of the contribution and interest funds with the January 22, 2018 school aid payment. This does not mean that employers will disburse the funds on that date.

We expect for individuals who worked for districts that have closed or dissolved since 2010 to receive a check directly from the Office of Retirement Services. Such individuals should make sure ORS has a current address on file.

13. When the money is returned, will it be subject to taxes?

But for the actions of the state, the money would have been wages. Therefore, in our view, the refund will be subject to employment taxes. If the original contribution was not subject to FICA, the reimbursement will likely be subject to FICA. Conversely, if the original contribution was subject to FICA, you should not be taxed twice. Only your employer will know whether FICA was taken out of the original contribution. MEA cannot provide tax advice to individuals. If you have questions about the taxability of your individual refund, please consult your tax advisor.

14. What happens if there is an issue with my refund, but I am not a member in good standing?

Only members in good standing are entitled to the full range of legal services available under the MEA Legal Representation Policy. An individual must be in good standing at the “time of the action complained of” and must maintain active membership in good standing for the entire time legal services are provided. Under the Legal Representation Policy, we have the right to deny representation when it appears that an individual became a member for the purpose of receiving legal representation. Signing up for membership contemporaneous with a dispute over a refund will result in a denial.

15. Has anything happened in the Court of Claims (trial court) since the Supreme Court issued its December 20, 2017 decision?

Yes. A status conference was held with Judge Stephen L. Borello on January 18, 2018. We believe an order will be issued as a result of that status conference. Based on discussions held, we believe the order will provide for the disbursement of the escrow funds to the reporting units (school districts and participating colleges) on January 22, 2018. The Court has scheduled a second status conference for February 5, 2018. The purpose of the second status conference is to review progress of disbursement to the reporting units and discuss any issues related to disbursement.

16. Will the Plaintiffs argue for additional interest as a prevailing party and attorney fees?

Yes. However, since the state does not agree to either, the parties have agreed to a briefing schedule. The Court of Claims will issue a decision on those issues thereafter.

MEA Advocating for Fast, Accurate Return of 3 Percent

From MEA.org:

Right before the holiday break, the Office of Retirement Services (ORS) put out information regarding how refunds would be handled through local school districts for employees owed their 3 percent after our unanimous legal victory before the Michigan Supreme Court.

After more than seven years of waiting for a resolution to this case, some speed is finally appreciated. But MEA is also working to make sure these refunds are handled correctly so that every school employee who is owed money receives it. That’s why MEA and the other plaintiffs in the case have asked the trial court to require ORS develop guidelines consistent with court decisions for how this money should be returned.  This will keep school districts from handling questions inconsistently – and ensure those districts aren’t left to clean up the state’s mess after years of frivolous appeals in this case.

For many employees, the refund is simple – they worked during 2010-2012 in the same place they’re working today. But what about those who’ve retired? Or left the profession? Or died waiting for their money to be returned? Both school employees and school districts deserve clear answers about how to properly handle the return of this money to those who earned it – and MEA is working to ensure that happens.

Pending the court’s response to our request for ORS to work with us to develop those guidelines, there are two things you can be doing now to prepare for the refund:

1 Gather together any records you have that show exactly how much money was taken from 2010-2012 – particularly copies of your paycheck details that itemize funds taken from your check.

2 If you no longer work in the district where you were employed in 2010-2012, get in touch with them and ensure they have your up-to-date contact information. (And be sure to share that information with us at webmaster@mea.org as well so we can keep you informed of any developments.)

College Presidents Pay, Why is it So Hard to Find?

State law (MCLA 388.1618) requires that each public school include on its transparency page a listing of those employees whose salary exceeds $100,000. Typically superintendents and a few others qualify. This reflects a long-standing public policy determination that the public deserves to know about highly paid employees.

Probably due to superior lobbying, state law does not require the same for community colleges. (State law requires that universities actually post every employee’s pay, including their presidents.)

To determine the salary of a community college administrator, one must apparently hope for a press report. For example, Southwestern Michigan College President David Mathews was the subject of a 2010 press report:

SMC News.jpg

When the SMC Board of Trustees increased his salary in 2010, it included an automatic 3% yearly increase that would result in a 2018 salary of $180,550. But trusting press reports doesn’t ensure the truth is getting out.

SMC’s fundraising arm, the Southwestern Michigan Foundation, must file yearly tax returns, which include the pay of its board members. President Mathew serves on this board.

Its 2015 IRS 990 federal return includes his compensation:

SMC 990.jpg

It is not known why his compensation reported above differs so markedly from the $325,785 total shown here. But it’s clear, there’s no justification for the lack of transparency for Michigan’s community college presidents.

 

FAQ From Michigan Office of Retirement Services.

PA 75 and 3% Healthcare Contributions FAQs

How much money will be refunded to me?

ORS will notify members of their refund amount soon. Please continue to check the What’s New section for more information as it becomes available.

When will I receive my refund?

ORS will provide the essential data regarding the refunded contributions and interest to employers no later than January 10, 2018. Employers will receive a transfer of the contribution and interest funds with the January 22, 2018 school aid payment. There are 53 districts that have closed, dissolved, or merged since 2010. The return of those contributions may be later than January 22 because a different methodology will be used to transfer those contributions.

What if I’m retired?

If you worked anytime during July 2010 until September 2012, your 3% healthcare contributions during that period will be returned.

What if I’ve moved/left the school I worked for?

This money will be refunded through your school district. It is important to update your address with the school where you worked during July 2010 until September 2012. If you worked for more than one school district during that period, be sure your address is current with each school district. If you are retired, update your mailing address in miAccount and we will provide it to your school district.

What if my district/school closed?

Some districts merged into others. If that is the case, the money will be refunded through the merged school district. If your district/school closed, we’re working on the plan to refund your contributions to you.

Do we get interest on these funds?

Yes, interest will be included in the refund you receive. The courts directed the administration to maintain the funds in a capital preservation escrow account, which accrues a very minimal amount of interest.

What about state employees?

Court cases regarding state employees have already been resolved. This is only for public school employees who worked during July 2010 until September 2012 and contributed 3% toward retiree healthcare.

Why can’t you send this directly to us instead of sending it to our employers?

There are taxation rules for these payments that can only be implemented by the employers.

How is the money refunded if the contributing member is deceased?

The school districts will issue the refunds. Each district will determine how to distribute the refund in this situation.

How will this impact my taxes?

The school districts will issue the refunds. ORS can’t speak to the tax implications.

Published December 21, 2017

Answers to your 3% case questions from MEA legal

Just issued by Mike Shoudy, MEA General Counsel. This document will be revised as new information emerges.

Frequently Asked Questions Regarding the Retirement Litigation

December 21, 2017

By: Michael M. Shoudy

MEA General Counsel

1. What changes happened in 2010 to the Michigan Public School Employees

Retirement Act (MPSERA)?

On May 19, 2010, the Michigan Legislature enacted Public Act 75 (PA 75) which

amended the MPSERA. The amendments, in part, required public school

districts and other reporting units to withhold 3% of each employee’s wages and

remit the amount to Michigan Public School Employees Retirement System

(MPSERS) which were classified as “employer contributions” to the trust that

funds retiree health care benefits.

2. What did MEA do?

MEA and AFT filed suit on behalf of their members challenging the

constitutionality of PA 75.

3. What happened in the courts regarding PA 75?

On July 13, 2010, the trial court issued a preliminary injunction providing that the 3% levy from wages of all applicable MPSERS members pursuant to PA 75 would be held in a separate interest-bearing account (escrow) until the trial court issued its ruling.

On April 1, 2011, the trial court issued its opinion finding that PA 75 was unconstitutional. The state appealed that decision to the Michigan Court of Appeals.

On August 16, 2012, the Michigan Court of Appeals held that PA 75 violated multiple constitutional provisions set forth in the Michigan and U.S. Constitutions, and therefore PA 75 was unconstitutional.

On September 27, 2012, the state filed an application for leave to appeal with the Michigan Supreme Court. The Supreme Court took no action on the application for nearly two years.

On July 1, 2015, the Michigan Supreme Court vacated the Court of Appeals August 16, 2012 ruling and remanded the case to the Michigan Court of Appeals to reconsider its prior ruling based on the Michigan Supreme Court’s April 8, 2015 decision regarding 2012 Public Act 300 (discussed below).

On June 7, 2016, the Court of Appeals issued its second decision regarding the constitutionality of PA 75. The Court of Appeals again found PA 75 unconstitutional, as the Act violated multiple constitutional provisions set forth in the Michigan and U.S. Constitutions.

On July 19, 2016, the defendants through Governor Snyder filed an application for leave to appeal with the Michigan Supreme Court.

On June 1, 2017, the Michigan Supreme Court issued an order granting the defendant’s application for leave to appeal.

The Michigan Supreme Court issued a final decision in the PA 75 case on December 20, 2017, and WE WON. See question 8 below.

4. What happened in 2012 to the MPSERA?

On September 4, 2012 and in response to the Michigan Court of Appeals’ August 16, 2012 decision regarding PA 75, the Michigan Legislature enacted Public Act 300 (PA 300) which amended the MPSERA. Public Act 300 required all actively employed members of MPSERS to make certain elections regarding their pensions and retiree benefits.

5. What did MEA do?

MEA and AFT filed suit on behalf of their members challenging the constitutionality of PA 300.

6. What happened in the courts regarding PA 300?

On November 29, 2012, the trial court issued a ruling dismissing MEA’s and AFT’s lawsuits. The parties appealed to the Michigan Court of Appeals.

On January 14, 2014, the Michigan Court of Appeals issued its decision affirming the trial court ruling finding PA 300 constitutional. The Court of Appeals reasoned that the voluntary nature of the contributions under PA 300 remedied the constitutional defects found in PA 75. An application for leave to appeal was filed with the Michigan Supreme Court. The Supreme Court granted the application on May 22, 2014 in the PA 300 case.

On April 8, 2015, the Michigan Supreme Court issued its decision regarding PA 300. The Court found PA 300 constitutional. In that decision, the Court noted “we emphasize that we address in this case only 2012 PA 300 and do not decide whether the Court of Appeals correctly held that 2010 PA 75 violated those same provisions.”

7. Did the defendants appeal the June 7, 2016 decision of the Michigan Court

of Appeals in the PA 75 case?

Yes, through Governor Snyder. The Governor publically announced his decision

to file an application for leave to appeal with the Michigan Supreme Court. The

Attorney General declined representation. A special assistant attorney general

was appointed. On July 19, 2016, the defendants filed their application. We filed

a response to the application. On June 1, 2017, the Michigan Supreme Court

issued an order granting the defendant’s application for leave to appeal. In other

words, the Supreme Court decided to review the decision of the lower court. The

parties filed additional briefs, and oral argument was held on November 8, 2017

in which MEA participated on behalf of its members.

8. Did the Michigan Supreme Court issue a final ruling in the case?

Yes. On December 20, 2017, the Supreme Court issued a 6 to 0 decision,

finding that PA 75 violated the Contract Clauses of the federal and state

constitutions. In other words, WE WON. The Court held: “Because 2010 Public

Act 75 is unconstitutional, the funds collected pursuant to that act before the

effective date of 2012 Public Act 300 must be refunded to the plaintiffs in

accordance with the Court of Appeals judgment.” Since the Michigan Supreme

Court is the highest court in the State, the decision cannot be appealed by the

defendants to any other state court. As this case primarily presents issues of

state law, an appeal to the US Supreme Court is highly unlikely.

9. What time period does the decision cover?

The Court of Appeals concluded that PA 75 was unconstitutional “as it existed

from its effective date until the effective date of 2012 PA 300.” Likewise, the

Michigan Supreme Court held “the funds collected pursuant to that act [PA75]

before the effective date of 2012 Public Act 300 must be refunded to the plaintiffs

in accordance with the Court of Appeals judgment.” ORS reports the time period

as July 2010 until September 2012. PA 300 went into effect on September 4,

2012.

If you chose retiree health benefits under PA 300, any payments under that Act

are lawful and not subject to this lawsuit or eligible for refund. See questions 4-6

above regarding PA 300.

10. Will I get a refund? If so, when?

If you had money taken out of your paycheck under PA 75, you are entitled to a

refund.

It is unknown, at this time, when or how your money will be refunded. Per the

Supreme Court and the Court of Appeals, the case will be remanded to the trial

court “which shall direct the return of the subject funds, with interest, to the

relevant employees.” We ask for your patience as we work through the logistics

with the trial court and the Office of Retirement Services. We will advocate for

the full return of your money as quickly as possible and keep you informed of any

developments.

11. What happens if I have retired? What happens if a member died?

It is MEA’s position that all members that had monies taken out of their checks

under PA 75 are owed a refund plus interest based on the actual amount taken.

Different members may have had different amounts taken based on individual

circumstances such as retirement dates, leave of absences, etc. We will also

advocate for a full accounting by the state in the trial court.

If a member unfortunately died before the conclusion of this case, it is our

position that the money should go to the member’s estate.

12. Where is the money?

As noted above, the trial court ordered the money at issue to be placed in an

interest-bearing escrow account. The account has a balance of more than

$550,000,000. The money is still being held in that account.

13. When the money is returned, will it be subject to taxes?

The trial court will make decisions about eligibility, payment, and methodology.

The IRS will likely take the position that the returned money is wages subject to

taxation. More information will be provided as we know more. MEA Legal will

continue to advocate for our members to receive the quickest and largest

possible refund consistent with the court decisions and the law.

14. Who is paying for the special assistant attorney general?

According to an MLive article dated November 8, 2017, Michigan taxpayers, as

of the date of the article, have spent at least $196,000 on outside attorneys at the

Dykema law firm since Governor Snyder decided to proceed on his own.

15. I heard MEA is asking for members’ contact information. Is that true?

Why?

MEA wants to keep all members up-to-date on this important case and might

need to communicate with you on an individual basis regarding your refund. We

suggest that you make sure that MEA has your current contact information

including home address, telephone number, cell phone number, and home email address.

You can send that information to the webmaster@mea.org. It is helpful

if you identify yourself by name, membership number (if you know it), and local

association/school district. We make all attempts to not communicate with

members on school email because of legal concerns.

16. What happens if there is an issue with my refund, but I am not a member in

good standing?

Only members in good standing are entitled to the full range of legal services

available under the MEA Legal Representation Policy.

18. Is this case supported by dues dollars?

Absolutely. More than seven years of complex litigation is costly. This case is

just one of many examples of your dues dollars in action. No one person could

have taken on this fight alone. We are stronger when we are together.

19. What if this FAQ doesn’t answer my question?

We know this case is of great interest to the membership. We will continue to

update this FAQ when we have additional information to share. We ask for your

patience as we continue to advocate on your behalf. If you do have additional

questions, please submit those to webmaster@mea.org.

The Mackinac Center: National Leader in Plan to End Unions

The Heritage Foundation was founded in 1973 with money provided by Joe Coors of the Coors Brewing Corporation. Joe wanted to create an outside operation to supply corporate-friendly “research” as well as testimony-ready experts for Republican politicians.

In 1975, ALEC was created to do the same on the state level by supplying model legislation written by corporate lobbyists, ready made for introduction. A few years later, in 1984, the Mackinac Center was founded by insurance companies to bring this corporate policy-making machinery to Michigan.

ALEC promises corporate funders that “winning the public policy debate will … have a tremendous effect on the bottom line of your company.”

A 1991 ALEC fundraising letter.

The handful of conservative think tanks then in place had enough success that by 1992 a franchising operation known as the State Policy Network was founded. Run in tandem with the Mackinac Center’s Think Tank School, the SPN has managed to create 63 conservative think tanks in every state except North Dakota.

In 2016, SPN launched a new program to “deliver the mortal blow to permanently break” the union “stranglehold” on the country. It intends to do this by providing the resources necessary in each state to “defund and defang” the only organized opposition to its pro-corporate agenda.

letterhead
A 2016 SPN fundraising letter.

Many of the techniques will sound familiar to those of us in Michigan who have been fighting most of these proposals for years.

With the Janus case soon to be decided by the United States Supreme Court, Right To Work will almost certainly be imposed nation-wide. While it has had only limited effect in Michigan, it has long been a Republican goal, with the hope to massively suppress union membership.

Ending payroll dues deduction serves to cut off any union’s life blood. Gutting certification requirements serves to unprofessionalize teaching and in turn, justify lower salaries. And ending collective bargaining kills any union’s greatest power to help its members and justify the payment of dues.

SPN also thoughtfully provides a Toolkit to help conservative think tanks across the country avoid the mistake of revealing their union-killing intentions, and instead use focus group approved messaging.

“Using terms like ‘union fat cats,’ ‘corrupt union bosses’, and other overly negative language reduces support for reform.” Instead, use terms like “workplace freedom” and “worker’s choice.”

One of the proposals addressed by the Toolkit, “Worker Voting Rights,” is an ALEC-written model bill that would require every local union to recertify every year. The MEA has 1,130 such local unions.

This proposal has been on the Mackinac Center’s wish list for many years. The intent is to tie up union time and resources that would otherwise be available to provide services to its members (reducing yet again opportunities to earn dues) and in the process cutting the number of local units and therefore, members. Defang and defund.

Its appearance in both the Toolkit and the Mackinac Center’s wish list is no coincidence. SPN gives the Mackinac Center props for its role in providing this anti-union propaganda (“intellectual ammunition”).

For each of its proposals, the Toolkit provides expected objections together with ready-made responses. For Worker Voting Rights, it suggests countering anyone exposing its union-busting purpose by pleading that it is instead simple democracy. “…just like voters have the opportunity to vote to elect lawmakers.”

SPN think tanks eagerly regurgitate these talking points. F. Vincent Vernuccio, until very recently the Mackinac Center Director of Labor Policy, wrote a guest editorial shilling for the same ALEC bill: “Just like we vote for our representatives in Washington…”

Vinny

The Toolkit is careful that its think tank members not mistake these Fifth Avenue selling points for the ultimate motivation behind these union-killing proposals. It makes this clear on the very next page :