RH Jones: Who is responsible for the 14% cap?

From RH Jones, March 31, 2008
Subject: Att'y Gen. Marc Dann's office answers inquiry of RC 3307.28

Respectfully submitted to all:

Part of my purpose of sending a multi-page letter to the Attorney General Marc Dann was to clear up in my mind when and who was responsible for placing the 14% employer cap onto the Ohio Revised Code (RC) 3307.28. I believe that many retired and active teachers shared my concern. Mr. Kevin M. McIver, Chief of the Opinions Section of Marc Dann’s office very thoroughly and aptly answered my questions. This has been a fine example of the great service this office is doing for Ohio’s people. I thank him for that profusely.

The When:

“The General Assembly raised the STRS employer contribution to a maximum rate in 1976. At that time the provisions that now appear in R.C. 3307.28 appeared in 3307.53. The legislation raised the maximum rate to 14% is 1975-1976 Ohio laws, Part II 2091, 2197 (Am. Sub. H.B. 268, eff. Aug. 20, 1976)…”

Interestingly, some pages from the Ohio laws Mr. McIver kindly sent mentioned, in part, that Am. Sub. H.B. 268 passed on April 29, 1976, was approved and filed on May 21, 1976. “(Certain Provisions of Act effective July 1, 1976)”. The interesting part for educators is that the effective dates came during summer vacation, especially concerning the Aug. 20 date. Note: July 1 is the usual fiscal starting date for public school districts.

Who:

Verne G. Riffe, Jr., Richard J. Celeste, James A. Rhodes, Ted W. Brown, and David A. Johnson signed the R.C. Most are now deceased. Interestingly, they were members of both political parties.

In my opinion, back in 1976, who could have predicted that our health care costs would inflate so dramatically in the 2000’s? In 1976, fortunately for educators, the employer rate for our STRS was raised from 13 to 14%. But, unfortunately, it was capped there. However, the OPERS, SERS and Police/Fire are, now, not included in this unfortunate cap. Mr. McIver stated: “That another retirement system may have the authority to set employer contributions without regard to a statutory maximum does not mean that STRS may set the level of its employer contributions at a rate that exceeds the statutory maximum specified in R.C 3307.28 The general Assembly grants STRS the authority to collect employer contributions, and in so doing has specified a maximum rate for the employer that STRS may not exceed. If STRS desires to set the employer contribution at a level that exceeds the current statutory maximum, it must be granted authority to do so by the General Assembly.”

Now is the time that our STRS needs to have a raise in that 14% cap. The House Bill 315 does just that. And, as in 1976, I hope that both parties can continue to work together once again to pass an increase in the employer contribution. History needs this correction.

Robert Hudson Jones, a STRS retired teacher member