May 21, 2015
“House Passes Bill Protecting TRS Revenues”
In a victory for the Teachers’ Retirement System and the nearly 150,000 active and retired members it serves, the Oklahoma House of Representatives this week passed HB 2243, making no changes in TRS annual dedicated revenues.
As OREA has reported in many recent updates, TRS receives a 5% share annually of the state personal and corporate income, sales, and use taxes. Last fiscal year, that amounted to almost $300 million in vital operational funds. The money has been instrumental in the significant progress the retirement system has been making in recent years toward 100% funding by 2025.
HB 2243 will be heard in the Senate soon. If passed there, it will become law with Governor Mary Fallin’s signature.
For many weeks, OREA professional lobbyists and hundreds of members worked to convince legislators to not divert dedicated funding away from TRS. Support to defend TRS funding was strong in the House, and, as weeks of OREA lobbying had its effect, resistance to the ill-conceived idea grew in the Senate, too. In recent days, OREA received information from reliable sources that the proponents of diverting TRS funding had given up on the idea.
OREA is cautious against premature celebration for what certainly would be a tremendous victory for TRS. Only when the bill passes in the Senate and the legislature adjourns for the session will TRS dedicated funding be fully protected for the 2016 fiscal year beginning July 1, 2015.
It is not too early, however, to express our sincerest gratitude to the hundreds of OREA members from all around Oklahoma who took the time and made the effort to contact their home district state representatives and senators in opposition to diversion of TRS funding.
OREA professional lobbyists found abundant evidence of member influence on the issue. Many legislators acknowledged receiving large numbers of calls and emails from retired educators urging their rejection of the plan, which could have taken as much as $60 million per year from TRS for an undetermined period of time. Loss of the revenue would have extended the time necessary for the system to achieve 100% funding by as much as 10 years, and make it even more difficult to achieve a cost-of-living benefits adjustment (COLA) for retired educators in the near future.
Special thanks must also go to many members of the OREA Government Relations Committee – plus several other OREA members – who came to the Capitol in the last two weeks to meet face-to-face with lawmakers, asking for their support to protect TRS dedicated funding. They did a great job in securing that support, while uncovering vital information regarding the status of the diversion plan.
The House of Representatives late Wednesday approved a state general budget bill for the next fiscal year, but it was not easily done. A combination of 42 Democrats and Republicans voted against the measure, with 54 voting for it. It remains to be seen whether there will be strong opposition in the Senate, where Republicans enjoy an overwhelming 40-8 advantage. If the budget passes the Senate, it is certain to receive the governor’s signature, since her office was a part of the negotiations with House and Senate leaders that produced the budget accord announced Monday of this week.
There is some disagreement among Capitol observers regarding when the legislature will close up shop for the 2015 session. Sine die adjournment could come as early as this Friday, or it could be delayed into next week, perhaps as late as the Friday, May 29, constitutionally-mandated final adjournment day.
OREA members can expect further updates on different aspects of the 2015 legislative session in coming weeks, including a legislative summary in the upcoming issue of the OREA News Bulletin, which should arrive in member home mailboxes around June 20.
Thanks for being a member, and thanks for your support for the OREA legislative agenda.
The 63rd Annual Convention & House of Delegates
Tulsa Hotel & Conference Center
6808 S. 107th East Avenue, Tulsa
Tuesday, September 29, 2015
Wednesday, September 30, 2015
Convention & House of Delegates
“State Superintendent Joy Hofmeister
Will Keynote 2015 OREA Convention”
The OREA Convention Committee is delighted to announce that Joy Hofmeister, Oklahoma Superintendent of Public Instruction, has agreed to serve as keynote speaker for the organization’s 2015 Annual State Convention, set for Tuesday and Wednesday, September 29-30 in Tulsa.
Hofmeister will address conventioneers Wednesday morning, September 30, at approximately 11:15 a.m. at the Renaissance Tulsa Hotel and Convention Center at 6808 S. 107th East Avenue.
The state superintendent’s appearance adds to the recent line of outstanding keynote speakers that have provided informational and entertaining presentations to members attending OREA’s biggest annual event.
Joy Hofmeister was elected November 4, 2014, to be Oklahoma’s 14th Superintendent of Public Instruction. A former public school teacher and small business owner, she spent many years in service to public education in Oklahoma, including a stint as an officer for the Jenks Public Schools Foundation Board of Directors, the Select Committee for the Study of School Finance, and other committees within the Jenks Public Schools.
In just a few months in office as the state’s top education official, Hofmeister has made a positive public impression due to her intellect, willingness to work with all education stakeholders, and genuine desire to make Oklahoma’s public schools the best they can be for all school children.
All four of Hofmeister’s children are graduates of Oklahoma’s public schools.
Hofmeister received a bachelor’s degree in Education from Texas Christian University, and holds teaching certificates in English and Elementary Education. She is currently doing graduate work in Education Administration at the University of Oklahoma. She spent 15 years operating Kumon Math and Reading Centers of South Tulsa, working with thousands of students to improve their educational outcomes.
Prior to election as State Superintendent, Hofmeister served from January 2012 to April 2013 as a member of the State Board of Education. She and husband Gerald Hofmeister reside in Tulsa.
(Members are reminded to make note of the change of date for this year’s convention. A spring event in recent years, the 2015 Annual State Convention will be held for the first time as a major fall kickoff event for OREA’s membership year.
Tickets now on sale: $15.00 each if purchased by August 31 increasing to $20.00 thereafter
Keep Pension System Out of Budget Talks
by State Rep. Randy McDaniel
Oklahoma faces a large budget shortfall. Difficult decisions will need to be made. However, using the pension system to solve other problems would be shortsighted.
In the past, as pension finances started to improve, resources would be cut to fill different budget holes and new unfunded benefits would be given. The combination of less money and larger benefits led to growing financial insecurity.
By 2010, the unfunded pension liability had grown to over $16 billion. The funding deficit was more than $500 million per year, despite record annual contributions. The state retirement system was on a pathway toward insolvency.
Leaders took responsibility. Major reforms were passed. From preventing additional benefits and closing loopholes, to increasing retirement ages and establishing a new plan, billions in cost-saving reforms were approved. Meanwhile, funding rates remained steady and pension investments rebounded. As a result, the huge funding gap has been closed and the unfunded liability is at its lowest level in a decade.
Now is not the time to retreat and undermine the headway that has been made. The mission continues. History doesn't have to repeat itself, but preventing the mistakes of the past will require taking a path less traveled.
As always, numerous bills have been filed this session to expand member benefits that are harmful to the pension system. Once again, these bills were suspended. The policy safeguards have been enacted to protect the retirement system, beneficiaries and all taxpayers. They must be upheld. The common-sense rules include knowing how much a proposal will cost and having a reliable way to pay for it.
As Will Rogers once said, “If you find yourself in a hole, stop digging.”
Nonetheless, another idea being discussed is to reduce the money going into the retirement system. Pension payments are not discretionary. Furthermore, the number of baby boomers moving into retirement is unprecedented. This demographic reality needs to be taken into consideration during budget negotiations. Pension funding must consistently exceed costs in order to prevent placing an undue burden on future generations.
A great deal of improvement has been made regarding the financial condition of the pension system. Decreasing the funds coming into the system, whether through the employer contribution rates or dedicated tax revenues, threatens the substantial progress achieved. It is the duty of all those elected to ensure the promises made to thousands of dedicated state and local employees are fulfilled, many of whom teach our children, protect our communities and risk their lives every day to serve the citizens of Oklahoma.
McDaniel, R-Edmond, represents District 83 in the Oklahoma House where he is chairman of the Business, Labor and Retirement Laws Committee. Reprinted from the April 15, 2015 edition of The Oklahoman.
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OREA Spotlight on New York City Holiday
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