Saturday, April 22, 2006
From Ralph Lloyd; Petro's proposal: Citizens' Amendment for Prosperity
April 22, 2006
Ralph L. Lloyd called this to my attention today from an article he read in the Cleveland Plain Dealer about Jim Petro's proposal on The Ohio Citizens' Amendment for Prosperity (CAP). I could not locate the article, but this item from the Bricker & Eckler website (below) explains it pretty well. http://www.bricker.com/LegalServices/industry/polsubdiv/cap.asp ~ KBB
The Ohio Citizens' Amendment for Prosperity
The Citizens' Amendment for Prosperity, supported by Ohio Attorney General Jim Petro, would amend the Ohio Constitution to limit permitted taxation to 5.5% of Ohio’s total personal income. Both chambers of the Ohio General Assembly must approve resolutions in order to place the proposal on the November 7, 2006 ballot. These resolutions were introduced in the House (HJR 12) and Senate (SJR 7) during the week of February 20 and are identical. The House Joint Resolution was introduced by Larry Wolpert (R-Hilliard) and the Senate Joint Resolution by Gary Cates (R-West Chester).
In order to reach the November 7, 2006 ballot the resolutions would require a three-fifths majority of each chamber. Ohio law requires any ballot initiative be filed with the Secretary of State not later than 90 days before an election. In the case of the November 7, 2006 ballot the filing with the Secretary of State is required by 4:00pm August 9, 2006.
Questions & Answers About CAP
What is the “CAP"?
The CAP, or Citizen’s Amendment for Prosperity, is a fiscal restraint proposal developed by Ohio Attorney General Jim Petro. The CAP would limit annual taxes to 5.5% of the total business and personal income earned in Ohio and would require the state to contribute to the Rainy Day Fund when state revenues are strong.
Is the CAP being used by any other states?
The CAP proposal is similar to the Headlee Amendment in Michigan. While there are many similarities between the CAP and the Headlee Amendment, the CAP would restrict state tax revenue to 5.5%, whereas the Headlee Amendment restricts state tax revenue to 9.49%.
Does the CAP apply to local governments?
No. The CAP only limits the amount of revenue the State can collect. The CAP specifically exempts local government from the tax revenue limit.
Does the CAP impact state mandates?
Yes. The CAP would prohibit unfunded state mandates on political subdivisions, unless the State and the political subdivision agree to share the additional costs, or the political subdivision makes no claim for funding within two-years of the new requirement.
What is a political subdivision?
Under the CAP, a political subdivision is defined as any county, municipal corporation, or township; any education, library, or other general special district; or any other taxing district of the state that is directly supported by tax funds.
Are there any exceptions to the limit on taxes?
Yes. If the governor declares an emergency and the legislature votes by a three-fifths majority to support the governor, the limit may be exceeded during the duration of the emergency. The emergency must be declared prior to incurring any expenses under that emergency request.
What happens if the state has a surplus at the end of the fiscal year?
The CAP requires contributions to the state’s Rainy Day Fund. General tax revenue collected by the state exceeding 5.5% must be transferred to the Rainy Day Fund. Annual contributions to the rainy day fund are capped at 2.5% above the tax revenue limit and the Rainy Day Fund may never exceed 5% of the general revenue fund. Any amounts that exceed the annual contribution limit or the total limit on the Rainy Day Fund are rebated to taxpayers in the form of income tax credits.
Is it possible for the CAP to be on the November 2006 ballot as a constitutional amendment?
Yes. A constitutional amendment can be proposed by either chamber of the General Assembly and must be agreed to by three-fifths of each chamber. Resolutions to place the CAP on the ballot were introduced in both chambers by Rep. Larry Wolpert (R-Hilliard) and Sen. Gary Cates (R-West Chester). Upon agreement by both chambers, the proposed amendment must be entered on the journals and filed with the Secretary of State at least 90 days before the November 7, 2006 election. This means that any attempt to place the CAP on the November 2006 ballot as a constitutional amendment requires filing with the Secretary of State by August 9, 2006.
For more information, contact Bricker & Eckler attorney Sean Mentel
Some questions about the two witnesses (STRS employees Grant and Ehlers) who requested immunity
Friday, April 21, 2006
Mary Ellen Angeletti: Minutes of April 2006 CORE meeting
The next CORE meeting will be held on Thursday, May 18th at 11:45 in the Sublett Room at STRS.
Warren County Teachers: Message for Judge Glaeden
The Honorable Carrie E. Glaeden
Franklin County Municipal Court
General Division, Courtroom 13A
375 South High Street
Columbus, OH 43215
April 21, 2006
Subject: Hazel Sidaway Penalty
Dear Judge Glaeden:
Warren County retired teachers have followed the trial of Hazel Sidaway for Ethics Charges as an STRS Board Member. Our teachers were astounded by the information that came forward during the trial. The evidence and testimony verified that an unbelievable climate of “entitlement” and greed prevailed at STRS.
Most astonishing, Hazel Sidaway, who swore under oath to protect teachers’ life long retirement savings managed by STRS, seems to have no remorse over her excessive spending of her colleagues’ savings.
Warren County teachers request that you fine Ms. Sidaway the maximum amount permitted under law for each of the two guilty findings. We request that the fines are paid to STRS. We request that you require Ms. Sidaway to do community service for the maximum required jail time for each of the two guilty findings. A suitable type of community service would be to have Ms. Sidaway spend one hour a day, five days a week for six months in nursing home for each of the two charges, assisting and providing companionship to any retired teachers who are living in the nursing home. Perhaps helping such teachers will help Hazel Sidaway understand whom she has hurt.
Warren County teachers and Ohio teachers have totally lost faith in STRS to protect our life long retirement savings and assets. We feel that a strong message must be sent to STRS that no one will ever permit such lavish spending of teachers’ life long retirement assets again.
Nancy B. Hamant
WCRTA Legislative Chair
XC: Barbara Carvey, WCRTA President
Thursday, April 20, 2006
Tom Curtis' speech to STRS Board 4/20/06: This board needs to review Dennis Leone's reports of 2003
Good afternoon board members, executive staff and guests. My name is Thomas Curtis. I am speaking today on my own behalf. I am an STRS disability retiree with 27 years of service.
The first time I spoke to the STRS board was June 2003. During my first 3-minute presentation, I requested that Herb Dyer, the executive director and each board member at that time resign, due to the unethical practices they had been part of for what appeared to be many years.
WOW! That seemed very radical at that time, but then few had seen the position paper Dr. Dennis Leone presented to the board on May 16th, 2003, entitled “STRS Organizational matters and entitled, “Restoring Faith, Trust, and Spending Practices.” That paper is still a highly relevant document. Further, to this date, there are still many unresolved issues within it. This board should not permit this, if you claim to be meeting your fiduciary responsibility. But then, we have a current board member who publicly stated she does not find it even relevant to read his paper, which, in effect, leaves only ten board members who are truly qualified, from this standpoint, to deal effectively with serious issues that will affect STRS members for the rest of their lives. Isn’t that mind-boggling? Do I want this kind of mindset on the board, No way!
Today, I am requesting the immediate review and consideration by the entire board, not only of Dr. Leone’s original position paper, but also his second, follow-up paper of
The facts revealed in Dr. Leone’s first paper greatly angered many STRS members upon learning that their retirement funds had been grossly misspent by the STRS fiduciaries, the very ones who were supposed to protect them! How could they do such a thing? What is more amazing to me is that all of them denied any doing anything wrong, and were themselves angered by the accusations made against them. Most have until this date continued to deny such wrongdoing, even when some have now been found guilty of such in court, and it is my hope all of the others will be closely scrutinized as well.
Most people asked themselves, WHY did this happen?! Were the employees not being paid well enough? NO, that is ABSOLUTELY not the case. The upper management and all key employees were and still are being lavished with benefits far and above what private and corporate people receive, though much of that payment has been and still is hidden from the public eye. This is not right and must be changed; I want value for my dollar.
Why should they be paid so handsomely, when the entire STRS membership is now suffering financially and will continue to do so, probably for the rest of their lives?
Please correct me if I am wrong here, but the employees’ ONLY job has always been to take the dedicated flow of income provided by the contributions from educators and their boards and invest it wisely according to the ORC 3307.15. What is so difficult about that?
Did these employees have to produce a product and market it to produce the income to provide for our retirement? NO! All they had to do was properly fund the benefits they promised us as we paid into the system, while we worked toward our retirement. Just think of the billions of dollars that have been paid into the STRS retirement system since 1920, yet we are not receiving what we were promised. Most of us have been robbed of what we were promised for our futures.
I do not have nearly the same benefits I retired with in 1998. That will only get worse as I live on. Yes, I am and always will be angry, despite what anyone else tells me. I worked for low wages throughout my career with the understanding from my union representatives that my pension and health care benefits for my spouse and myself were safe and would provide adequately for both of us for the rest of our lives. I trusted that to be the case. That was a lie, because the STRS has already reneged on what my wife and I were told by an STRS counselor when I retired. My health care costs for the two of us now total over one third of my total pension. That will soon get much worse in January 2007, according to what I have learned by attending these board meetings.
Have the employees that the membership entrusted their retirement funds with throughout their career provided us with what we were promised?
Let me ask each of your retirees in the audience a question being asked by Howie Mandel of his guests on a new popular TV show, DEAL OR NO DEAL.
In my opinion, the answer is rather simple. These otherwise good people allowed their own greed and warped thinking to validate the pervasive culture of entitlement that had apparently become common practice at the STRS. This sense of entitlement had completely permeated the upper management. Most likely, those employees and board members who disagreed with this thinking either came into line with it, or were ostracized and deemed uncooperative. These greedy people caused many honest employees to become just as tainted as they were. That is a shameful disgrace and these people should be removed from our employment.
Thank you for permitting me to express my concerns today.
John Bos speaks out: Sunshine Law, 'Hairspray,' damage control, ethics violations, spending controls and more
State Teachers Retirement System, Ohio
April 20th, 2006
My name is John Bos, Elida, Ohio. I am a retiree with 31 years of service as a teacher and administrator. My father also paid into STRS starting in 1932 and our daughter is an active participant. I was also an adjunct professor teaching school administration courses for 9 years. I had 14 years of business experience after I retired.
I would like to commend the former member of the STRS Board that requested a jury trial regarding ethics charges. This trial has given the members of STRS a small peek into the workings of the STRS Board. Issues that are now very clear include:
The total lack of understanding regarding “The Sunshine Law” by board members, and by the legal adviser to STRS. The recent event of reaching Board conclusions over the telephone or Internet indicates that this problem still exists. Baker's School Law and Nexis-Lexus would be a good source for the staff and board to learn about “Sunshine Issues”.
Inadequate legal advice may have been given to the board members regarding Ohio Ethics guidelines and possible legal assistance to “cover up the evidence”.
Comments that "Hairspray" tickets were to be billed to STRS by a former board member further documents these issues. Comments that the discussion to plan this trip was observed by the Ohio Auditor and Attorney General Office adds even more concern to retirees. They will be judged in future elections.
The need for the current STRS Board to investigate why current employees requested immunity from an felonies relating to their role as a staff member at STRS.
The need for the Board to carefully review the employment status of staff members that may be guilty of violations.
I commend Dr. Asbury for writing the “Damage Control” newsletter to all retirees. Neither he nor I, however, can be assured that these actions did or did not impact any decisions.
Are we still doing business with the two companies that were involved in the unfortunate and regrettable events? Kim Alwater, Smith Barney spokesman said that they would make a statement after the trial was completed. No statement has been released. Perhaps they could make a contribution to the health care stabilization fund in the amount of the ethics violations.
STRS now takes its place in history with Watergate and Coingate. We now have Hairgate. Yet at the same time current board members do not want to learn about the historical events that led to today. No doubt you drove to the meeting in your new Yugo because of the great economy, but have not learned about its mechanical history and lack of available parts.
The question also remains why no one at STRS staff or board members stood up and said, “This behavior is wrong”. The abuse only stopped when the legislature, retirees, newspapers, and The Ohio Ethics Commission, and the courts became involved. Where were the internal auditors and the honest staff members that we trusted with our retirement funds? You have lost the confidence of many people.
It is very important that those of you on the current board take appropriate actions regarding the misconduct of ANY employee. It is the only way to insure that these events never happen again.
In conclusion, I would also ask you to genuinely listen to board members who are making recommendations regarding spending controls and additional oversight measures.
A forensic audit by an independent party would be money well spent to regain confidence.
When Mother Teresa was asked if she took pride in the work that she had done, she replied by saying, “I don't take pride in the work that I have done, but rather the reason that I have done this great work”. She was committed. As board members and staff, I hope and pray that you are committed to regain the pride that my father had for Ohio Education and the dedicated staff serving Ohio Schools.
Tuesday, April 18, 2006
Dennis Leone: Internal auditors tried to tell us; were likely ignored
Paul Kostyu: Sidaway unlikely to be last charged
If your name is Stephen Mitchell and you work at STRS as the deputy executive director for investments, you should be talking to an attorney, too. And there might be a few others at the pension fund who should consider getting legal advice.
A clear message came from the Franklin County Municipal Court last week. While Hazel A. Sidaway, a former Canton City Schools teacher, was on trial, prosecutors linked her to others on the STRS board and its culture of entitlement. The message: The Ohio Ethics Commission and prosecutors know about your shenanigans, and they’re coming after you, maybe as soon as next month.
Sidaway’s two convictions for violating state ethics law were a test of the strength of evidence in a more than two-year probe of corruption at the pension system. Offered a deal similar to that for former Executive Director Herb Dyer, who was convicted on one charge, Sidaway refused. She claimed she had done nothing wrong when accepting four tickets to a Cleveland Indians game and two tickets to a Broadway show.
She insisted they were meetings for conducting STRS business. The only people with her in the four box seats 10 rows back from the Indians’ dugout were her family. She and fellow board members attended the Broadway show “Hairspray.” She said they talked business before taking their front-row seats at the Tony-winning musical, during intermission and after the show. At least they didn’t give Ohioans a bad name by talking during the performance.
Perhaps the board should be charged with violating Ohio’s open meeting laws for conducting business without notifying the public. “They were not discussing matters appropriate for an executive session,” said Paul Nick, chief investigator for the commission. “Who knows what’s been going on?”
Something more troubling, however, became clear at Sidaway’s trial. Based on her own testimony, former in-house STRS attorney Cynthia E. Hvizdos apparently gave Sidaway bad legal advice, and she may have helped cover up the violations once the ethics commission began its investigation.
“Cindy Hvizdos agreed to assist in purposely disguising the tickets,” Nick said about her testimony. “She might be liable.”
Prior to the trial, Hvizdos offered to help Sidaway, who didn’t disclose that communication with her own attorney. He was caught off-guard and put at legal risk for failure to disclose the communication to prosecutors. Hvizdos retired because she has multiple sclerosis and apparently no longer practices law. So it’s not likely she will face charges or sanctions.
Sidaway’s ethics violations may not be the worst. One poorly kept STRS secret concerns a former board member who took his golf clubs on many, if not all, trips he made on behalf of STRS. I’ve always found it difficult to play golf at night. So does that mean this board member was playing hooky from meetings while he was swinging a club?
Sidaway was not convicted of illegally accepting meals at high-end Columbus restaurants. Those meetings, too, could have been attempts to avoid the state’s open meetings law because the board’s investment counselor was careful to take only three or four members at a time, not a quorum. If board members were so intent on holding meetings over food, they could have eaten in the STRS cafeteria.
Apparently, the food wasn’t good enough, and neither was the show.
Reach Copley Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail: email@example.com
Nancy Hamant: STRS executives hiding heads in sand, hoping it will all go away
Monday, April 17, 2006
Message from the Executive Director (STRS): Damon addresses Sidaway case and possible future charges against STRS individuals (a finger in the dike?)
The STRS Ohio news e-mail list is designed solely to provide timely and accurate news and information about legislation, benefits and other issues affecting the STRS Ohio membership.
Mike Hanke: No reason to travel; The STRS office is loaded with highly paid people who could have told them the STRS investments were tanking
Hanke is general manager of The Repository. He can be reached by telephone at 330-580-8301, by e-mail – firstname.lastname@example.org, or by writing 500 Market Ave. S, Canton, 44702
Nancy Hamant comments on executive director's message
More criminals within the walls of STRS?
Tom Curtis to Lara Baker: A big thanks
Sunday, April 16, 2006
Plain Dealer finally reports on Sidaway trial
. Ex-official of teachers' fund convicted of ethics violations Associated Press . Columbus- A jury convicted a former member of the state teachers' pension board of two misdemeanor ethics violations on Friday but acquitted her of four other counts. Hazel Sidaway, who represented active teachers on the board from 1986 to 2003, had been accused of accepting free meals, hotel stays and tickets to entertainment events. Sidaway, 62, was found guilty in Franklin County Municipal Court of conflicts of interest for accepting two tickets to the Broadway show "Hairspray" and four Cleveland Indians tickets. The theater tickets came from Tacoma, Wash.-based Russell Investment Group while Russell advised the agency on investments, and the baseball tickets were from Smith Barney, now a subsidiary of CitiGroup. The jury acquitted the Sidaway had testified that she learned long after the events that the consultants had paid for the tickets, and then reported them. She also said she relied on advice from the staff at the State Teachers Retirement System on dealing with investment consultants and filling out ethics reports. The former executive director of the system was found guilty Sept. 1 of accepting golf outings and other gifts from Russell. Herb Dyer pleaded no contest to one charge of failing to report gifts to the Ohio Ethics Commission and was fined $1,000. Dyer was forced to resign in August 2003 after criticism that the retirement fund spent millions of dollars on bonuses, artwork and travel while assets plunged.
Ex-official of teachers' fund convicted of ethics violations
Columbus- A jury convicted a former member of the state teachers' pension board of two misdemeanor ethics violations on Friday but acquitted her of four other counts.
Hazel Sidaway, who represented active teachers on the board from 1986 to 2003, had been accused of accepting free meals, hotel stays and tickets to entertainment events.
Sidaway, 62, was found guilty in Franklin County Municipal Court of conflicts of interest for accepting two tickets to the Broadway show "Hairspray" and four Cleveland Indians tickets.
The theater tickets came from Tacoma, Wash.-based Russell Investment Group while Russell advised the agency on investments, and the baseball tickets were from Smith Barney, now a subsidiary of CitiGroup.
The jury acquitted the
Sidaway had testified that she learned long after the events that the consultants had paid for the tickets, and then reported them. She also said she relied on advice from the staff at the State Teachers Retirement System on dealing with investment consultants and filling out ethics reports.
The former executive director of the system was found guilty Sept. 1 of accepting golf outings and other gifts from Russell. Herb Dyer pleaded no contest to one charge of failing to report gifts to the Ohio Ethics Commission and was fined $1,000.
Dyer was forced to resign in August 2003 after criticism that the retirement fund spent millions of dollars on bonuses, artwork and travel while assets plunged.