Kansas Governor Proposes Using Pension Money to Cover Budget Gaps Created By His Tax Cuts
Members, we must be watchful of proposals by state officials to “use retirement monies to solve financial woes in Alabama”. We cannot afford to allow any elected officials to get their hands on the RSA funds. Read story below to see what other states are doing!
Janice J. Charlesworth
Alabama Education Retirees Association
In 2012, Kansas Gov. Sam Brownback signed a landmark bill that delivered big tax cuts to high income earners and businesses. Less than two years after that tax cut, the state's income tax revenues plummeted by a quarter-billion dollars -- and now Brownback is pushing to use money for public employees’ pensions to instead cover the state's ensuing budget shortfalls.
Brownback's proposal: Slash the state’s required pension contribution by $40 million to balance the state budget. But Kansas already has one of the worst-funded pension systems in the nation. The state was also recently sanctioned by the Securities and Exchange Commission for not accurately disclosing the shortfalls.
Brownback, an icon of tea party economics who was re-elected in 2014, defended his proposal to divert money from the Kansas Public Employees Retirement System (KPERS), telling the Wichita Eagle: “It’s kind of, uh, well where are you going to go for the funds? And I don’t like it, but it’s kind of what’s your other option if you don’t hit K-12 and higher ed with allotments?”
Brownback joins fellow Republican Gov. Chris Christie in coupling large tax cuts and credits with cuts to actuarially required pension payments. In New Jersey, Christie slashed required pension payments while signing legislation expanding tax credits to corporations, and doling out a record amount of corporate tax subsidies. Many of those subsidies have flowed to firms whose executives have made campaign contributions to Republican political organizations. Last week, New Jersey pension trustees filed a lawsuit against Christie for not making legally required contributions to the state's pension system.
Both Brownback and Christie promoted their tax cuts as instruments to boost economic growth. A recent review of federal data by the Kansas City Star found Kansas "trails most other states when it comes to job growth.” Likewise, an investigative series by Gannett newspapers recently found “New Jersey's job growth rate [is] the second worst in the nation. ... New Jersey's middle class has lost billions in income through layoffs, salary cuts and wage freezes [and] more than 100,000 job seekers have been unemployed for months on end.”
Illinois followed a somewhat similar path. For years, lawmakers did not make the full actuarially required pension payments, causing severe funding shortages in the state's pension system. While lawmakers said there was little money to meet pension obligations, Democratic Gov. Pat Quinn signed a corporate tax cut in 2011 that is projected to cost the state more than $370 million a year in lost revenue. Two years after signing that bill, as pension funding gaps swelled, Quinn signed legislation slashing public employees' retirement benefits. An Illinois judge last month ruled that the legislation violated the state's constitution, though the ruling is being appealed.
Kansas, New Jersey and Illinois have each seen their credit ratings downgraded in recent years. That could end up increasing costs for the states when they borrow money.
Former Executive Secretary of AERA, Dr. Richard (Rick) McBride Passed Away
Dr. Richard (Rick) McBride passed away on November 19 after a long illness. His wife, Sue, said that he passed away peacefully. Dr. McBride turned 80 years old on October 18.
Dr. Rick McBride was Executive Secretary of AERA from July 1, 1987 to June 25, 2001. Under his leadership, the Alabama Education Retirees (AER) Foundation was created for the purpose of awarding scholarships to active teachers. Also, Dr. McBride began the effort to recognize retired education personnel resulting in the adoption of the legislative resolution establishing Tuesday of American Education Week as Alabama Retired Teachers’ Day!
A memorial service will was held at Whitfield United Methodist Churc in Montgomery. In lieu of flowers, donations may be made to their church, the Whitfield UMC, or to the AER Foundation.
Cards may be sent to Sue McBride c/o AERA 828 Washington Avenue; Montgomery, AL 36104
Congress could soon allow pension plans to cut benefits for current retirees
Congress could soon allow the benefits of current retirees to be cut as part of an agreement to address the fiscal distress confronting some of the nation’s 1,400 multi-employer pension plans.
Several unions and pension advocates opposing the move, which would be unprecedented, say that permitting financially strapped plans to cut retiree benefits would violate the central promise of traditional pensions: that they would provide a defined benefit for life.
“This proposal would devastate retirees and their surviving spouses,” said Karen Friedman, executive vice president of the Pension Rights Center, a nonprofit group. “The proposal would also torpedo basic protections of the federal private pension law . . . that states that once benefits are earned they can’t be cut back.”
Several of the nation’s large multi-employer pension plans are on a course that would leave them insolvent within a decade. If that occurred, the federal insurance fund that protects the retirement benefits of more than 10 million Americans in multi-employer plans could collapse.
In a proposal made more than a year ago, a coalition of plan trustees and unions said the only way to salvage the most distressed pension plans without a government bailout is to allow them to cut retirement benefits before they run out of money. The reductions would be voted on by the trustees of individual plans, as well as retirees, under proposals now being negotiated by lawmakers. Advocates point out that the plan laid out by the coalition would leave pensioners in distressed plans with more than what they would receive from government pension insurance if their plans failed.
“The plans that are headed for insolvency would have benefit cuts under existing law,” said Randy G. DeFrehn, executive director of the National Coordinating Committee on Multiemployer Plans. “At least this proposal would preserve benefits above existing law.”
In recent weeks, negotiations over the proposal have heated up on Capitol Hill. Still, some key elements are unresolved, including a way to satisfy objections from UPS, which withdrew from one of the most distressed plans in 2007 but would be on the hook to make up for any pension cuts affecting its retirees.
If those details can be ironed out, congressional aides said an agreement is possible before the current session of Congress ends this month.
“Members are still discussing the details about a possible legislative solution to the multiemployer pension crisis and remain hopeful Congress will act before the end of the year,” said a bipartisan statement for the House Committee on Education and the Workforce. “Any decisions regarding how a possible solution might move through the legislative process will be made by leadership at the appropriate time.”
Multi-employer plans are formed by businesses and unions that join forces to provide pension coverage for a wide range of working-class Americans from truck drivers to grocery store clerks and construction workers.
Their finances have suffered over the past decade in large part because of stock market plunges and a decline in employment and union membership, leaving the plans with a growing share of retirees to current workers.
Employees covered by the plan are part of a diminishing share of private-sector workerswho are still covered by pensions that pay them a fixed percentage of their pay for the rest of their lives. The idea of allowing cuts to benefits now being paid to retirees is supported by some unions, even as it is adamantly opposed by others.
“This is nothing less than a declaration of war by Congress on American retirees,” said R. Thomas Buffenbarger, international president of the International Association of Machinists and Aerospace Workers. “Allowing cuts to existing retirees’ pensions is simply the wrong way to address the problems of a few troubled pension plans. . . . The long-standing promise of a secure pension system must not be overturned by unaccountable lawmakers in a lame duck session of Congress.”
Since 1974, the federal law governing the nation’s private-sector pensions have prohibited cuts to the benefits of workers who have already retired — a precedent that is now endangered.
Opponents have accused Congress of negotiating the deal “behind closed doors.” Also, while the general proposal has been aired in legislative hearings, they say the specific legislation now being hammered out has not.
“Retirees, most of whom are living on modest incomes, have few alternatives, and no ability to plan for or absorb cuts in their benefits,” said Joyce Rogers, senior vice president of government affairs for AARP, the lobbying group for older Americans. “Before demanding reductions in the pension income of current retirees, Congress should first require the key stakeholders to take every possible action permitted under current law to restore their plans to solvency.”
See Original Link HERE
Expressions of Appreciation for Sunday - So Southern
We survived our big production of So Southern. If I must say so myself, it was just great!! In spite of the awful weather, it was a delight. I do not know about the proceeds yet; however, I believe that it was a success.
A special thanks for everything you did to enable us to have such a grand performance. A special thanks to Ben and Tanja Miller for providing us with just a great production.
Did we not have the perfect venue? I felt like I was in New York at some big theater. Donny Wilson and the WSCC Staff were just super. We will forever indebted to them for being such wonderful host.
It was most definitely unusual way to observe Retired Educators Day for American Education Week. I still smile when I think about the funny lines. This venture provided us with many laughs and will benefit children, too. Also, a special thanks to everyone who sold tickets (CERA Members, Cullman Public Library and the Cullman Museum).
It was something we could not have pulled off by ourselves. It was most definitely a Team Effort. Thanks again for your support. I know we will never be able to top this!!!
Jo Anne Minnitt
Cullman County ERA
We would like to thank:
Ben Johnson South, Writer
Tanja Lewis Miller, Performer
Narrators of All Things So Southern
Wallace State Community College
Dr. Vicki P. Karolewics, President
Donny Wilson, Museum Director
CERA Program Committee
Kay Callan, Chair - Dean Green
Dot Gudger - Jethro Harbison
Jean Holt - Elta Shoemaker
Hilda Speegle - Mildred Terrell
Members of the CERA
The AERA Staff & Elected Leaders
Janice Charlesworth, Executive Director
Robert Davis, President of AERA
Kathy Archer, District 1 Director
The Cullman Times Staff
David Palmer, Editor
Zach Winslett, Staff Writer
Loretta Gillespie, Correspondent Writer
Sallee Chandler, News Room Assistant
Channel Two Staff
Dennis Borick, Owner/Station Manager
Voluteering at McWane Science Center
Dear Fellow Retired Teachers,
Some of us retire and some of us don’t.
I retired from public school teaching in 2007 and I am a member of AERA.
I came upon the most amazing opportunity. I am now the Director of Early Childhood Education at the McWane Science Center. How fun is that?
McWane is looking for retired educators to help us in our Homeschool labs .This opportunity is for volunteers to help out in the lab, not to teach or create lesson plans.
So it is the FUN part!
The K-6th grade labs are Tuesdays from 2-4pm January 13, February 3, March 10, and April 14th.
The 7-10 grade labs are January 7th February 11, March 11, and April 8 from 2-4:30pm.
There are many other opportunities too!
If you want to volunteer for the above or ask about our other fun opportunities , please contact:
McWane Science Center
If you have questions about the above you may contact me or Matt.!
Thank you and I look forward to hearing from you!
Director of Early Childhood Education
McWane Science Center
200 19th Street North
Birmingham, Al. 35203