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June 16, 2004

FELDMAN WILL NOT SEEK REELECTION AS AFT PRESIDENT

AFT President Sandra Feldman announced this week that she will not run for reelection at the Union’s upcoming convention in July. Feldman told AFT leaders of her decision on Wednesday during meetings in New York City of the Union’s Program and Policy Councils and the AFT Executive Council.

In her remarks and in a message to AFT staff, Feldman cited her recurrence of breast cancer that requires weekly treatments. The required travel to fulfill her duties as President, she said, would be a serious impediment to her recovery. “As you can imagine, this is not a decision I came by lightly,” she said, “You all know how much the AFT, our members, and all those we serve - especially the children - mean to me.”

Feldman said that she was confident the AFT would be “in great hands,” praising AFT Secretary-Treasurer Edward J. McElroy and Executive Vice-president Nat LaCour as “excellent, experienced leaders.” The Union’s Executive Council, state and local leaders, and staff, she added, “are the best in the country.”

The job ahead is daunting, she said, “but as a team, we’ve always risen to the occasion, and I know we will again now.” Feldman cited the Union’s preparation for the November elections and its pivotal role in crucial races, as well as its role in fixing and fully funding ESEA without jettisoning standards and accountability. The AFT is also “in the fray on overtime and Medicare, prescription drugs, nurse-patient ratios and on and on - right where we should be.”

Feldman also acknowledged the many letters, cards, and e-mails from members and leaders around the country that “continue to sustain me, as does my knowledge that you will continue to fight the good fight. You know I’ll be there with you,” she said, “even if I’m now in a different role.”

The State Legislature is presently considering changing the MPSERS retirees’ health insurance coverage to a graded premium system for newly hired employees. The graded premium system will require 30 years of service to achieve a 90% premium payment by the State.

This change will certainly have an adverse effect on new hires, particularly mid-career hires, adjunct faculty, and women commencing or recommencing their careers in mid-life.

To the extent that this change encourages new hires to enroll in an Optional Retirement Program rather than MPSERS, the number of MPSERS’ participants - and the magnitude of their political influence - will decline. The long-term effect of lost political clout may well lead to a diminution of pension benefits for current employees and current MPSERS retirees.

Please see the articles below for further information on the graded premium legislation and information on contacting your legislators - or you can go to the Local 1650 website: hfccft1650.org.

                                                                                                     -John McDonald

We have bad news on this front. The graded scale premium bills, HB 5682 and 5696, are scheduled to be referred to the House Education Committee. We expect this committee to be less favorable to RCC’s position on the bills than the Committee on Senior Health, Security, and Retirement. We would like immediate phone calls, e-mails and letters to go to the members of the House Education Committee. Below is a list of the members of the House Education Committee, their hometowns, phone numbers, fax numbers and e-mail addresses:

                                                                                                      -Ellen Hoekstra

The graded scale premium, proposed in HB 5682 (Rep. Mike Pumford, R-Newaygo) would change the subsidy for school retirees’ pension benefits for any employees hired after June 30, 2004. Currently, 88-89% of retiree health benefits are paid by the system and around 11-12% by the retiree. Under the proposal, a retiree with ten years of service credit would have to pay 70% of the premium, with the system paying only 30%. However, retirees with thirty or more years of service would have to pay no premium at all for health, dental, and vision insurance. For each added year of service, the retiree gains 3% of premium. Thus, 30 years of service credit would receive a lower level of premium support than all retirees now have.

The proposal would create an economic hardship for many low-income employees. School districts rely on the work of a wide range of employees whose wages also range widely, from a full-time paraprofessional whose annual income may be $12,000 per year to upper level administrators, whose annual income may exceed $100,000. Because of the role of salary in the pension formula, the end result will be that many support staff, once they retire after a significant period of service in schools, will have financial difficulties in affording access to health benefits. Currently, the cost of health insurance for one year for a pre-Medicare retiree is $6617. A retiree with ten years of service has a pension that averages around $3000 a year, yet 70% of even the current premium costs for the retiree alone would cost over $4600 per year-substantially more than the retiree’s annual pension!

The proposal appears to create particular hardships for school employees who work part-time. A school bus driver in some districts may have to work for 60 years to attain the full 30 years of service credits.

The proposal does not bring any immediate savings to school district or college budgets because it would not begin to have any impact until employees who have yet to be hired have worked long enough to retire.

Graded-scaled premiums would hit women employees particularly hard. Women are disproportionately represented among part-time and lower-income school employees. Also women are more likely to take time off for family responsibilities including child care and care for elderly family members. The graded scale premium makes “family time” much more expensive.

Although the graded-scale premium is presented as an incentive for school employees to remain employed for more years, it also creates a disincentive for people to move into teaching or other forms of school employment later on in their lives. Schools having difficulties filling positions may have a new source of problems in attracting new employees.

In 1997, when the state was faced with financial difficulties in resolving the Durant case, it came to school employee and retiree organizations and asked for their help. These groups agreed to help out through some modifications in the actuarial assumptions funding MPSERS. In exchange for accepting this increased risk to their funds, the Legislature repealed both the defined contribution plan and the graded scale premium. For the legislature to pass either of these two proposals again would be to go back on its deal.

The proposed bill will also create an impediment to districts and colleges seeking to negotiate early retirement plans as a solution to their budgetary problems because employees with less than 30 years of service will no longer be interested in retiring, due to the high cost of their health care.

Because the MPSERS health insurance plan will be unaffordable for a substantial number of school and college retirees, the State’s Medicaid population is likely to increase, exacerbating an already difficult financial problem for the state.

DEARBORN SCHOOLS MILLAGE RENEWAL

On Tuesday, August 3, Primary Election Day, Dearborn School voters will decide the fate of a ballot proposal to renew the Dearborn Schools 6 mill “hold harmless” operating millage. This millage amounts to one-third of the Dearborn Schools’ operating funds. It is a millage renewal - not a tax increase

At stake in this election are the quality of instruction and scope of programs in the Dearborn Schools, and in turn the future of the Dearborn community - as well as careers of our brothers and sisters in the Dearborn Federation of Teachers, Dearborn Federation of School Employees, and Dearborn Schools Administrators Association. As in the past, Local 1650 will contribute funds and assistance to the campaign.

Local 1650 members residing in Dearborn are urged to vote for the Dearborn Schools millage renewal in person or by absentee ballot. You are also urged to remind friends and family residing in Dearborn to do likewise. Further information regarding the August 3 millage renewal is available at the Dearborn Public Schools website: www.dearbornschools.org.

                                                                                                           -John McDonald

LOCAL 1650 JACKETS

If you are interested in purchasing an HFCC-FT, AFT Local 1650 jacket, you may do so by contacting JoAnne Dalton (x9666). The jackets are “King Louie” (union and USA made), lightweight and lined, and dark blue with tan trim. They are available in sizes M, L, and XL and cost $60.