Mario Iacone responds to Charlie Seipelt

From Mario Iacone, May 3, 2009
Subject: Response

Charlie, you may have misinterpreted my post on COLA.

First, I did not research the information with Steve Mitchell. I simply contacted him to verify that COLA cuts were “on the table.” When I found out that they were and began receiving feedback from teachers and retirees that COLA cuts would not be too bad, I researched COLA and produced that information to make it clear to all, the substantial financial impact of COLA.

Second, we are going to campaign that significant cost reductions in STRS operating expenses be made first, before any cuts are considered for the active and retired membership of STRS. However, the research and facts to develop a list of cost reductions is taking time because of our limited access to correct data. I, as you, am very angry over the situation. But, emotion and anger can be self defeating. Our material will be professional and business like.

Third. All of us must work to rid STRS of excesses in operating expenses. But, let’s not lose sight that it will be losses of billions of dollars in the fund that will cause all to endure substantial cuts. That issue must be addressed and rectified first. STRS investments are at a high enough risk level that the worst may not yet be over. An unexpected “shocker” in the economic situation may drive our pension fund value even lower. We must get them to implement a good risk management policy to prevent such huge losses in the future.

Fourth, any proposed cuts must be approved by the legislature. Therefore, this will eventually become a political issue. Actually, it may already be a political issue since four of the Board members are political appointees.

In order to have impact in the political arena, we are going to need massive numbers of well informed STRS members. And, in my opinion, the political approach will be most effective at the local level. All of our legislators went to school and have significant ties with many of their former teachers. That personal relationship at the local level will have much more impact with legislators than phone calls, emails, and presentations from strangers. Most important to a future political campaign will be the fact that we have accurate and substantial data to support our case.