Senate Dems Slam GOP for Passing a Political, Not Practical, Solution to Teacher Retirement
Senate Democrats were quick to point out that a Michigan Public School Employees Retirement System reform pushed through by Senate Republicans today will actually cost Michigan money. The GOP plan to move all new school hires to a 401k plan will cost the state billions of dollars in retirement costs to pay for school employees who remain under the old system. The state Office of Retirement Systems estimates that the plan as passed today could cost the state an additional $2-3 billion over the next two decades. The nonpartisan House Fiscal Agency also estimates the new system will add additional costs approaching $300 million annually.
“The plan pushed through by the Republican Majority is not a fiscally sound plan, despite their claims that they are the party of fiscal responsibility,” said Senate Democratic Leader Gretchen Whitmer. “Their plan was more about scoring political points and using teachers as a scapegoat, and when offered an alternative supported by their own Republican Governor that would provide a better path forward, they ignored that bipartisan solution and instead pushed forward with their own misguided plan.”
The plan supported by Senate Republicans today was the latest vindictive action in their attack on teachers. While the Republicans have been laying blame at the feet of teachers for shortfalls in the retirement system, the real problem rests with 15 years of legislators raiding the fund in order to fill budget holes. The retirement system had been successfully prefunded until it was tinkered with by Governor Engler, leading to drastic changes in how the system was operated. Hardworking school employees who played by the rules are now being asked to foot the bill for mistakes made by Senate Republicans.
Low-income earners within the school system are being hit especially hard by this punitive action. Almost 65% of these retirees receive pensions of $22,000 or less. This legislation represents a doubling of costs to these retirees.
“I don't understand how the Senate Majority can justify waging war against our seniors and making them the scapegoats for all of our state's financial challenges. These people worked hard, played by the rules that were in place when they planned for their retirement and now that they are retired, the Legislature is changing the rules. This is wrong,” said Senator Glenn S. Anderson.