Herbart: As budget and road discussions continue, “Pensions for Potholes” schemes still deserve opposition

MEA President thanks Gov. Whitmer, Dem legislators for standing
against GOP efforts to tie pensions to road funding debate

EAST LANSING — In a letter today to Democratic legislators, MEA President Paula Herbart thanked them and Gov. Gretchen Whitmer for strong stances against GOP-backed “Pensions for Potholes” schemes.

“While I’m not shocked, I’m certainly dismayed by the news that every Republican proposal for addressing our crumbling roads and infrastructure centers on risky schemes to spend money meant for school employee pensions on potholes,” Herbart said.

“Without any other plans on the table, we appreciate that Gov. Whitmer moved the focus to finishing this year’s budget and forced a longer-term conversation about the revenue we need to meet our state’s obligations – for our infrastructure, for our students and for our educators.”

In her letter, Herbart laid out the arguments against the concepts of bonding or reamortizing the unfunded liabilities in the Michigan Public School Employees Retirement System (MPSERS):

  • The risks and costs are staggering. According to conservative economist Patrick Anderson’s latest research, there’s only a 50/50 chance that bonding unfunded liability will bring in more than it costs.  As for reamortizing the liability, Anderson pegs the long-term costs of at $9.9 billion for a five-year extension and $20.4 billion for 10 years.  With those odds and those costs, neither of these schemes are a good deal for taxpayers.
  • This is NOT “free money,” as some are calling it. School employees have paid more out of their pockets to help stabilize MPSERS over the past decade. To use those sacrifices to solve our road funding issues would be no different than simply taking money from their personal bank accounts to pour fresh concrete.
  • There is no “crisis” to be averted in paying off unfunded pension liability.  This is another rumor started to stoke fear and prompt attacks on retirement security, as has been done for the past decade.  Since the prior administration, the state has a plan and a schedule to pay off these liabilities by 2038 – and it doesn’t call for a spike in payments.
  • The public doesn’t support these gimmicksAccording to a poll released last week by EPIC-MRA, more than two-thirds of voters oppose the bonding and reamortization schemes.  In fact, that same survey showed strong public belief that educators are under-compensated – further highlighting the question of why school employees continue to be a political target.

Herbart asked lawmakers to share these points with their colleagues and their constituents, saying, “This issue isn’t likely to go away, which is why we’re going to keep fighting the fight.  Every lawmaker needs to know why Pensions for Potholes schemes are not the way to fix our roads.

“As a state, we can do better than attacking the retirement of current and future school retirees to address our state budget issues.”

Contact: Doug Pratt, MEA Director of Public Affairs, 517-337-5508

Legislation Newsroom


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