Lansing continues war on teachers with pension system fix (Society’s Slideshow)

By Dave Palmer

Lansing legislators are again showing their true feelings toward educators.

First, they moved to remove collective bargaining rights from teachers. Then, school districts began imposing 10% pay cuts without negotiating stateside concessions. Next, the legislature moved to force teachers to pay 20% of their health care costs out of the salary that has been reduced by 10%.

Now, the legislature has passed a bill that will drastically change the public pension system for teachers. The proposed changes will not only require current teachers to pay more into the system or convert to a private 401(k), but will also reduce the amount of money current retirees are receiving and reduce their health care benefits.

As a second-year educator, I am outraged, disgusted, and insulted by these proposed changes. At one point in time, back when collective bargaining agreements had the force of a contract, teachers negotiated a public pension plan in lieu of a pay raise. The idea was that since the state couldn’t afford to give teachers pay raises at the time, at least the state could provide for teachers in their retirement.

Rick Snyder, already proving himself one to not uphold agreements made by previous administrations with the Detroit revenue-sharing agreement, will no doubt sign this legislative atrocity into existence thereby nearly completing bis agenda of forcing educators to prove that they are not in it for them money.

To be fair, the pension system is in dire straits. Changes to the program do need to be made, but why not change it so that teachers aren’t forced to subsidize their jobs, health care, and retirement? Why not repeal the changes to the Michigan Business Tax and reinstate it as a flat 2% tax with no loopholes? Why not ask people across the state for 0.1 mills of new property tax to finance the failing system?

The answer to those questions are simple, and the same: Because Rick Snyder and the Lansing Legislature believe that $1.4 billion in tax breaks for their business cronies are more important than the teachers that provide them with educated employees. Tax breaks for industries that don’t need them trump the retired teachers that gave the politicians enacting them the education they needed to run for office then rip them off for their pension money.

How are retired teachers to pay more into the pension system? How are current teachers to subsidize the public plan when they are being forced to take drastic pay cuts and pay 20% of their own health care costs? This is not a formula to attract the best and the brightest educators to Michigan. This is not even a formula to attract even mediocre candidates.

Based on this latest move, it is apparent that Lansing is not interested in attracting the best and the brightest from this or any state. They would rather allow for-profit corporations run cyber-charters so they can outsource education to the lowest bidder. They would rather trample on the collective bargaining rights of teachers to pay for egregious tax breaks that the state can’t afford and the recipients don’t need.

I hope every educator remembers in November that this Legislature would rather give $1.4 billion in tax breaks to their business cronies than have educators who are properly compensated for their long hours and otherwise generally thankless job. I hope every parent remembers in November that the reason teachers can’t afford to purchase facial tissues, pens, pencils, and other emergency supplies is because of Lansing’s war on teachers.

 

To Tax or not to Tax? A question for the Michigan Supreme Court (Society’s Slideshow)

Wednesday, September 7 marked the day that the Michigan Supreme Court hears arguments about Governor Rick Snyder’s law that makes it possible for the state to tax retiree pensions. The AARP a and other groups representing retirees raised concerns regarding the law’s consitutionality when the law was first passed.

The Michigan Constitution states that public pensions cannot be “diminished or impaired.” Previous to this law, they  considered a contractual obligation by both public and private sectors exempt from taxes. This measure is the cornerstone of Snyder’s attempt to bankroll a $1.7 billion tax cut for businesses in the form of eliminating the Michigan Business Tax.

The constitutionality of the law is further called into question because it exempts certain income levels from paying the tax, and requires others to only pay on a portion of their total pension income. Still others have to pay different rates based on the year they were born. The Michigan Constitution specifically bans taxes that are “graduated as to rate or base.”

Snyder is performing a combination of an end run followed by a hail mary by taking this issue directly to the Michigan Supreme Court. The end run is accomplished by preventing senior citizen advocacy groups from bringing suit against the State of Michigan. The hail mary is accomplished by throwing the law at the Michigan Supreme Court and seeing whether he achieves his goal of taxing people until they die.

The very fact that Snyder is asking the Supreme Court to rule on this issue before a lawsuit can be filed indicates that he believes that he might lose in a fair fight. The last thing that Snyder wants is for retiree groups to get their lawyers together to draft a complaint that makes sense to the justices.

Instead, he has chosen the pathway of the preemptive strike. Don’t let them see what’s coming before it’s already there.

Eliminating taxes for businesses in Michigan will do nothing to cure the economy in Michigan. It will not increase consumer confidence and get them out spending again. Therefore, businesses will have no reason to take on more employees. The money saved from not paying taxes will wind up in the pockets of entrepreneurs across the state.

This entire charade may wind up being a huge publicity stunt. If Snyder gets the verdict he wants, he will trumpet his foresight and ingenuity. If he doesn’t he will bemoan that the decision does not meet his definition of “shared sacrifice.” I’m sure that will lead to other “austerity measures” in trying to balance the state budget and attract more jobs to this state.

A more effective approach at the outset would have been to impose a single flat tax for all businesses. No loopholes, no special considerations. Businesses must pay their taxes, end of story.

A simple 1% increase in the state income tax would have been enough to eliminate the deficit and create a budget surplus. However, instead of “raising taxes,” Governor Snyder seems to truly believe he is “not raising taxes” by creating new ones and eliminating the Earned Income Credit which mostly benefits poor people by lowering their taxes.

It has become clear that Snyder and his contemporaries are on a mission to make sure that the only people contributing to “shared sacrifice” will be the people who can least afford it. Whatever the effect of his grand scheme to bring jobs to Michigan, you can believe it will be spun to make him look the saint when he is actually the sinner.