RH Jones, Dennis Leone: Sub. HB 71 and some disturbing financial projections at STRS

From Dennis Leone, December 13, 2006

Subject: Re: Sub HB 71 (J. Stewart) may hurt STRS military veterans members

Thank you Bob.........and by the way, you are 100% correct about how Cleveland area school districts that are now paying a portion of the actives' 10% is actually hurting STRS. I had not thought about it until you wrote it. I will bring it up on Thursday at the STRS Board meeting. It represents another reason why the STRS staff projection of teacher increases averaging 4.5% has been way off. All financial projections at STRS, Bob, for the past 15 years has been based on the assumption that actives' payroll will grow 4.5% -- which it did up until 2002. The past 3 years, however, the state average has been 2.7%. This is due basically to 5 factors:

1. Few public school teachers overall due to cuts to hiring freezes.

2. Smaller raises.

3. Decline in public school students, due primarily to the creation of 305 charter schools, which serve 72,000 pupils.

4. Charter school teachers being paid far less..

5. Districts offering partial payment of the actives' STRS 10% in lieu of raises.

Thanks again.

Dennis Leone

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From RH Jones, December 13, 2006
Subject: Sub HB 71 (J. Stewart) may hurt STRS military veterans members

To all:

In my opinion , this bill is a legislative effort to "up-date" veterans purchasing of military time credit to add to their retirement bases for computation of our STRS retirement benefits. In a time of war, I applaud the effort in this bill to include service credit for National Guard Duty. However, it appears to me that "add-ons" to this bill cuts out Inactive Reserve Time. And, among other "short falls" this new substitute Ohio Revised Code (ORC) change may hurt some veterans. And, it may cause some vets to have to "pay back".

In March of this year 2006, K. Fluke, PhD. and I brought up to the STRS board the fact that there was much confusion generated by ORC 3307.752 that was "up dated" in 1996. In effect, though imperfect, ORC 3307, may award better benefits to vets who purchase, or purchased, military credit. The previous bill was poorly written and needs "fine tuning" for clarity. But should not, in any way, be at the expense of some veterans. Our STRS Executive Director, Damon Asbury, kindly wrote to me that: "All aspects of purchased service provisions are currently being reviewed by the Ohio Service Study Council, (ORSC). Members of that oversight body are concerned that current purchases of service provisions are creating unfunded liabilities to the Retirement System. However, I will ask that the provisions be re-examined to insure fair treatment for all." I hope by his statement: "fair treatment for all" was to mean: fair treatment to all military veterans. Our STRS, after 11-years of political neglect, is straining to provide benefits promised to their members. Funds are tight. I understand that. However, making up any "short fall" by "short changing' some veterans should be closely watched. A comparison between the old ORC and this Sub HB71 needs to be carefully made.The bill is moving quickly.

Adding to the confusion is the STRS pamphlet: "Purchasing Service Credit" (15-119,5/05/26M). The pamphlet does not make absolutely clear the aspects of purchasing military credit. That needs refining as well. The section on page 10, "Free military" is especially confusing.Page 11, Cost is confusing as well. As I mentioned in my last sentence, of my last speech, before the STRS board was: "You are the bread of life". Our STRS is the physical "bread of life" for us retirees. Extreme care should be taken with crafting literature that impacts the lives of STRS members. Those of us who happen to be military veterans certainly, by our service, earned our benefit. They should not, under any circumstances be taken away. If funds need to be found. They should not be found by cutting benefits to military veterans; they should be found somewhere else.

There is an expression: "If you enjoy your democracy, thank a veteran." If you can read this, I might add: If you enjoy your democracy, thank a veteran who happens to be a teacher. As a veteran and a teacher, I ask not for your thanks but that you to contact your state representative for our support, quickly; and, especially, if you are a military vet, to ask for support from your American Legion, the VFW, and the many other military veteran's organizations. The teacher unions should help too. This HB71 need all of their close monitoring. There should be NO GIVE BACKS, only clarification in this bill.

I am very sorry for not letting you all know of this above problems before now. I hope that I have not been remiss.

Robert Hudson Jones, a STRS retired member
Life Mem. of the American Legion, VFW, Korean War Veterans, 31st Inf, Reg, Assoc., NEA, OEA, AEA, NEOEA, ORTA & proud to be a CORE