On Monday, the governor announced he was vetoing two bills in the name of teachers, while leaving a gaping hole in education funding.
The legislature passed several budget bills, and Gov. Stitt used his veto authority to reject three of them:
- HB 2741 directed funds intended to go into the Teachers’ Retirement System this year and next, but language in the bill would pay the money back over the subsequent five years.
- HB 2742 took future funding from police, fire, and law enforcement pension systems, also paying it back later.
- HB 2743 took funds from road and bridge repair to help fund public schools.
Without these bills, it will trigger catastrophic cuts to education — 12% next year.
This veto leaves public schools with $370 million less in funding. The governor said he made this choice to help teachers. Cutting resources — and probably teaching and support jobs — does not help teachers.
The governor has offered no solution for this gap.
“The bottom line is that Oklahoma kids need their classrooms funded, and Gov. Stitt failed to indicate where the legislature should get that funding when he vetoed HB 2741 and HB 2742,” OEA President Alicia Priest told The Oklahoman on Monday. “We need more than a veto. We need solutions.”
Since Monday, we still have heard no solutions.
When TRS was poorly funded in the early 2000s, the legislature began dedicating additional tax revenue into TRS every year. This money is in addition to what employees and employers pay, as well as whatever the fund gains from the financial markets.
Those who have been in education for decades remember the dark days when we wondered if the pension system would collapse. In the years since, the legislature has faithfully built the funds up. Lawmakers in the past two years have shown fidelity to public schools with millions more in classroom funding and pay raises for teachers and support professionals.
No one wants the pension systems to fail, including OEA.
The governor said he vetoed these bills because he cares about teachers. We’re grateful for that sentiment. In normal times, we would oppose any reduction to retirement funding. These are not normal times. Our retirees are in desperate need of a cost-of-living adjustment after 12 years of waiting.
Public education advocates should not have to choose between supporting children and supporting those who gave their lives to this work. It’s a false choice. The governor has hundreds of millions in federal relief funding available. He can solve this problem. A veto without a game plan is no solution.
Key things to know
- The legislature is still contributing significant funding to the pensions.
- The budget deal created by the legislature does not take any money from state pensions. The money already in the pension fund stays put, but future funding to TRS, which is usually about $300 million a year, will be decreased to about $230 million a year for two years, then will go up to $330 million a year for five years.
- The budget deal created by the legislature requires by law that the money not paid into pensions over the next two years is paid back.
- The pension money is being redirected to fund public schools.
A word about a possible COLA
The House has unanimously passed a cost-of-living adjustment this session, and the bill is now in the Senate. We have been encouraging our members to reach out to Senate leaders and ask them to take a vote on this bill.
It has been disappointing to see Tom Spencer, the executive director of the Teachers’ Retirement System, consistently support the financial gain of the pension system seemingly without factoring in the actual people who fund the system and depend on it for their pensions.
Mr. Spencer’s position seems to be to oppose any measure that would decrease funding for TRS in any way.
OEA, however, believes financial gain must be balanced with the need to ensure beneficiaries are able to live off the pension they receive.
We care strongly about the wellbeing of TRS.
But in the case of this COLA, we think a one-time, 1.5% dip into the funding ratio is an extremely reasonable tradeoff for providing retired educators their first COLA in 12 years.
If Senate leaders don’t pass HB 3350 this session, it will take at least two more years for the legislature to even have the possibility of passing another COLA.
The way Oklahoma law is written, any proposed cost-of-living adjustment must be reviewed by a pension actuary, a professional who evaluates the health of a pension system. The review process starts in the first year of the two-year legislative session, and lawmakers can pass a COLA the next session if they like the results of the study. That means if lawmakers do nothing this year, retirees will have to wait at least until 2022. They have already waited more than a decade.
Key things to know about the COLA
- Giving a cost-of-living adjustment to retirees will cost the state exactly $0.
- Every dollar paid out to an Oklahoma retiree puts $1.39 back into the Oklahoma economy. This helps all Oklahomans, not just retirees!
- Education retirees haven’t had a cost-of-living adjustment in 12 years.
- If lawmakers don’t pass a COLA now, retirees will have to wait another two years AT LEAST because of state law.