Dan MacDonald's comments to STRS board April 16, 2026

From Dan MacDonald

April 25, 2026

PROPOSED BUDGET GROWS TO 9.8% AFTER MY SPEECH

Mr. Chair and members of the Board, good afternoon. I am Dan MacDonald, an STRS retiree with 38 plus years of service and Executive Director of Local 279R, Northeast Ohio AFT retirees regularly attending Board meetings since 2014.

Last month, during the Executive Director’s report, he mentioned to be prepared for the 2027 budget that would have an 8.5% increase. In my discarded speech, I addressed the budget with “Would the 2026-27 proposed budget address the needs of actives/retirees or STRS staff or give preference of one over the other?”

FY 2026 operating budget had a 9.2% increase which included salary adjustments presented by CBIZ April 17, 2025 for all: non-investment and investment staff. If I’m not mistaken, the proposal was even improved by the Board. More money was added. 33% of last year's increase addressed new hires, both opened positions and new budget roles.

I reread a paper written by Rudy Fichtenbaum titled Reform at STRS.  Using the numbers from the Defined Benefit plan he pointed out that “about 79% of STRS’s expenses are investment expenses. But even if we were to reduce unnecessary expenses to zero, would we have enough money to restore 30 years of service to active members and an ongoing 3% COLA for active and retiree members. The answer is clearly no!”

So now we approach a budget that has grown by 17.7% in two years.  Before February 28, the beginning of the Iran whatever it is, I’d say the 9.2% was well spent with this year’s di minimis amount addressing actives, retirees and overseer legislators, plus staff through FY 2026 budget. I remain concerned for pre-2000 retirees since I do not know health care premiums/plan designs yet.  Their increases and adjustments might totally eat up the 1.6%; they are most vulnerable. Judgement on the 8.5% will be assessed in a year.  Treadwater needs to continue to shrink and restorations continue. I need to say this; Investment Department, we need your success and appreciate you in these monstrous, unstable times.

STRS’s fiduciary responsibilities are for actives and retirees.  I am looking forward to “heart”y restorations for actives and healthy COLAs for retirees.