Education, Michigan Republicans, Teachers — April 13, 2012 at 11:45 am

Michigan GOP continues its attack on teachers – pensions & healthcare now on the chopping block


Why would ANYONE want to be a teacher in Michigan???

Last month, I wrote about the latest attack on teachers in Michigan, an effort to strip benefits and cut into their pensions. Facing an unfunded liability of over $45 billion, Michigan Republicans are set to take it out of the hides of teachers with Senate Bill 1040. The bill will take $380 million from teachers in the first year alone and reduce the unfunded liability by $7.6 billion (Senate analysis HERE.)

The Michigan Education Associate (MEA) has a good analysis of the bill HERE and HERE. They note that this effort is in addition to the 3% increase in teachers’ contributions to their health insurance enacted in 2009. Here are some highlowlights:

  • Increased contribution rates (to 5% for Basic or 8% for MIP, PLUS the additional 3% for retirement health) to retain the current multiplier of 1.5% for future years of service in the calculation of a pension.
  • Employees choosing to not pay the higher contribution rates would either have to freeze their defined benefit accrual and shift to a 401(k) style plan with a 4% employer contribution OR have the multiplier for any future service lowered to 1.25%.
  • Retroactively impose the graded premium subsidy program on all active employees (rather than only those hired after July 1, 2008).
  • Cap the premium payment for retirement health benefits at 80% for active AND retired members — effectively doubling the premium payment for many current retirees.
  • Eliminate retirement health benefits for all future hires, replacing it with an employer-matched health savings account, and cap final average compensation at $100,000 for new employees.

The elimination of retiree health care for new teachers and replacing it with a 401(k) plan is boggling. Imagine having to gamble the health care you will receive after you retire on the stock market. Think about what has happened to 401(k) values over the past five years. That should give everyone pause.

At a hearing at the state Capitol last Wednesday, teachers lined up to tell their stories about how this would impact them and their families. With an average teacher salary of only $63,024, shifting more costs back to the teachers is going to drive many of them from the profession, cause many of them to work well after they should be retired and will reduce the numbers of people pursuing this very important career. Because why would you want to be a teacher in Michigan when you are under constant assault?

I received an email from a teacher this week that tells the story:

I teach in Michigan. I won’t much longer if stuff like this keeps happening.

I’ve invested $17,000 on Graduate School over the past three years because, 1) I have to, the State mandates it, and 2) it’s the only way to make enough money to actually support my family. The cuts over the past few years and decisions by the legislature involving current employee health care and retiree health care have seen my take-home pay decrease. SB 1040 might put me out of my house. There’s talk of further concessions from our association as well.

Teachers are already running for the doors (almost literally…I know of people already quitting at a young age, and many more who are simply going to walk away, find other work, and/or are making plans to do so) and more are soon to follow if this keeps up. I feel like the public either doesn’t know about all of this, or they don’t care.

It seems that the legislature is pushing this quickly, like a lot of other things. With term limits and all of the money in politics, it seems more and more clear that these guys will never actually represent the voters. Once they get in office, we don’t matter, since they won’t be in office long enough for our prolonged constituency to really matter.

I’m close to giving up.

I understand that this problem of unfunded liability for teachers’ pensions and retiree healthcare is something that must be dealt with. But teachers have already sacrificed greatly. More to the point, we should value teachers, not treat them as if they are somehow not worthy of being compensated.

Teachers are not only of extremely high importance to society in general, they are employees of the government and, yet, they are being treated counter to every successful management paradigm in existence. If you want to destroy morale, harm productivity and drive away the best people for the job, Michigan Republicans have the plan for you.

Those in charge of Michigan’s government, most notably our CEO Governor, speak incessantly about running the government like a business. However, they are not running the government LIKE a business; they are running it FOR businesses. Nearly everything they do is to help benefit private businesses and it is at the expense of those who can afford it least. These so-called tax cutters have actually raised taxes on most Michiganders to the tune of $1.4 billion. Their budget actually increases the taxes of two-parent families at the poverty line by $678 year!

It’s time for us to ask our elected officials to stop the shift of taxpayer money to the private sector and to quit solving their financial problems on the backs of those who are most vulnerable. Start now by contacting your House and Senate representatives. Then follow through in November when you go to the ballot box. In the meantime, get involved with a campaign for someone who actually represents your interests. We cannot afford to lose in November 2012 and we need all hands on deck.