For eligible Michigan teachers, August provides a narrow window of opportunity to drop their union membership and escape the requirement of paying union dues or fees.

August currently is the only month in which teachers can exercise their rights granted under the state's right-to-work law. Unlike other union workers, who can leave the forced payment of dues or fees at any time of the year when their contracts expire. 

Teachers who are satisfied with their current union are free to keep their membership and continue supporting it financially.

The issue has had the Michigan Education Association concerned for months. In January, MEA President Steve Cook said the union would use "any legal means at our disposal" to work against teachers who want to leave the union outside of the August window.

Cook revisited the issue again recently when he sent an email to MEA members claiming, among other things, that an independent union that decertified from the MEA significantly increased costs for its members. That claim was not true, but his email brought to light the August timeline for departures.

"We were concerned (about teachers not knowing about the August window), but then in an attempt to squash our efforts to get the information out, Michigan Education Association President Steve Cook ended up spreading the word," said F. Vincent Vernuccio, labor policy director for the Mackinac Center for Public Policy.

"We believe that under the right-to-work law, educators should be able opt-out at any time," Vernuccio said. "However, for the time being, we know they can opt-out in August, so we want to make sure those who want to leave their union will be able to take advantage of their worker freedom rights."

The Mackinac Center has setup the website, www.MIWorkerFreedom.org, to provide information, explain the importance of the law, host videos of union workers talking about exercising their rights and post opt-out letters.

Teachers who are working under right-to-work contracts that pre-date March 28, 2013, when the law went into effect, still have an option to pay fees instead of dues, which typically are less.

"They can opt-out and just become agency payers or religious objectors as they've been able to do for several years," Vernuccio said. "Another option for teachers who no longer want to be in the MEA would be to decertify in favor of a local-only union. It's a way of enjoying the privileges of collective bargaining without supporting the six-figure salaries of union leaders in Washington and Lansing. That's what teachers in Roscommon did last year. In Roscommon, the change resulted in lower union dues."

(Editor's note: This story has been slightly edited since its original posting.)

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Michigan Capitol Confidential Right-to-Work Coverage

Michigan Worker Freedom

The failure of Detroit’s pension systems has been blamed on a long list of abuses and unfortunate economic events.

Unfortunately, that has had the effect of understating the most fundamental source of the failure: deeply flawed assumptions about future investment and payroll growth.

The state constitution requires governments to pay for pensions as they are earned, but doesn't specify a particular formula for doing so. The takeaway, essentially, is: "Make good, reasonable assumptions about future investment and payroll growth — ones that don't require the world to suddenly become free of surprises and setbacks — and, on that basis, set aside enough each year to cover the future benefits each employee has earned for another year of service."

Two things stand out about this instruction. First, if the assumptions going in are flawed, then the pension system's performance will reflect that. Second, politicians and policymakers have plenty of room to make such unrealistic assumptions — and strong incentives to do so. Rose-colored assumptions about tomorrow mean officials can get away with putting insufficient amounts into the pension system today.

And that's exactly what happened in Detroit. Importantly, this isn't unique to the Motor City. Almost every state and municipal pension system has done the same, including Michigan's largest, the one for public school employees. Officially, the school pension system has $24.3 billion in unfunded liabilities, and this is understated because of optimistic assumptions similar to those made by the officials in charge of Detroit's retirement system.

The common woe-is-us explanations for Detroit's pension failures — falling payrolls and tough markets — are just excuses. Investment growth projections are supposed to be long-term and reflect the reality that recessions and bear markets happen. And if year after year payrolls are shrinking rather than growing, then officials should adjust their assumptions to reflect reality.

There's plenty of blame to go around, but a proper understanding of the causes of Detroit's pension failures is necessary to avoid the same fate in other cities and in the far larger school employee pension system.

Last year, state legislators ducked a chance to fundamentally reform that state-run system. Let's hope they revisit this before the same flaws cause it to follow the same path as Detroit's pensions.

(Editor’s note: This commentary originally appeared in the Detroit Free Press on Aug. 10, 2013.)

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James Hohman is assistant director of fiscal policy, and Jack McHugh is senior legislative analyst at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich.