In response to a Michigan Capitol Confidential article about higher compensation for union executives, the Michigan Education Association sent a letter justifying the salary increases by making false claims to local leaders.
The memo, which was sent Dec. 2 to all local presidents and is reprinted on the union’s Facebook page, says:
Yesterday we filed our annual LM-2 filing with the US Department of Labor. The Mackinac Center is reporting ‘huge’ pay increases for MEA Executives. As some of you know, the LM-2 lists every person to whom MEA has written a check to over the past year – for example, if you’ve received a reimbursement check you are listed in the LM-2. The issue with the LM-2 though is they list everything as income. So for the officers in addition to salary, the auto allowance, expense account and any reimbursement is also considered ‘income’ in the LM-2.
But according to the federal Department of Labor the MEA is incorrect.
As reported previously by Michigan Capitol Confidential, “While some of its dues-paying members are taking pay freezes, top executives of the Michigan Education Association took salary raises ranging from $13,591 to as high as $48,385 in 2014, according to the financial reports the union recently filed with the U.S. Department of Labor.”
MEA president Steve Cook’s response that the LM-2 considers “everything as income” and counts “any reimbursement” as salary is false.
On the LM-2, a federal form required yearly by the government, the compensation of labor executives is spelled out. The main categories making up total compensation are “gross salary,” “allowances,” “disbursements for official business” and “other disbursements not reported" (see below).
Ian Burg, the district director covering Michigan for the U.S. Department of Labor, cited instructions for how unions deal with payments to or on behalf of officers. Burg confirmed that the reimbursements mentioned in the MEA's letter would fall under categories other than salary.
"[O]ther than the exceptions noted in the instructions, anything other than salary/wages/lost time/etc. would be reported in either Columns (E), (F), or (G) depending on the nature of the disbursement," Burg said.
A second Department of Labor employee, James Haskins, who is Chief Branch of Audits, agreed.
"The correct interpretation is that generally most 'auto allowances and other reimbursements' would fall in Columns (E), (F), or (G)," Haskins said.
According to the Department of Labor, “gross salary” (column “D” on the form) – which is the increase discussed in the Michigan Capitol Confidential article and a follow-up from the Detroit Free Press – does not include other reimbursements. Other allowances besides salary are included in separate columns (“E” and “F” on the form). The explanation from the department of labor for column F reads, “Enter all direct and indirect disbursements to each officer that were necessary for conducting official business of the labor organization, except salaries or allowances which must be reported in Columns (D) and (E), respectively.”
In its forms, the MEA did fill out expenses under column F. But those were not included when reporting the salary increases for the union executives.
The union letter also took issue with Secretary/Treasurer Rick Trainor receiving a 44 percent increase in salary according to the reports they filed. The MEA said this is a “billing issue” with his employing district. When asked about this salary increase from Michigan Capitol Confidential and the Detroit Free Press, the union declined to offer any explanation.
MEA communications director Nancy Knight did not immediately respond to a request for comment about the letter.
Here is how the compensation form for MEA executives on the LM-2 looks for the past two years (click to enlarge):
2014:
2013:
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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One Step Toward 'Reinventing' Michigan
Governor, Legislature can embrace innovation
Over the past four years, there’s been a lot of talk about “reinventing” Michigan. Gov. Rick Snyder and this Legislature have made significant strides toward that goal by improving the state’s tax structure, modernizing education policies and beginning to revamp the state’s regulatory regime. On that last item there is more to be done. House Bill 5951 would embrace innovative ride-sharing technologies used by companies such as Uber and Lyft.
HB 5951, introduced by Rep. Tim Kelly, R-Saginaw Twp., would create a state-based regulatory framework for these so-called transportation network companies. The version of the bill passed out of a House committee last week would create reasonable requirements that strive to uphold the safety of drivers and riders. For instance, all drivers would need to be at least 21, undergo a thorough background check and be covered by a $1 million insurance policy. Additionally, all vehicles would need to get annual inspections by a Michigan-licensed auto mechanic.
Although statewide regulations can sometimes thwart disruptive innovations such as these, the proposed rules appear to be an improvement over the ones developed at the local level. For instance, Ann Arbor and Detroit do not appear to have figured out how to handle Uber and Lyft yet, with Ann Arbor trying to shut them down this past summer and Detroit threatening to do likewise. Rep. Kelly’s bill would prevent local governments from further overregulating ride-sharing companies, creating an opportunity for all Michiganders to benefit from these car services.
Establishing a welcoming environment for ride-sharing companies would position Michigan uniquely as a national leader in embracing technological innovations and investments. Unfortunately, the state recently took a step backward when it created new barriers for innovative automobile companies to do business here. Some car manufacturers, such as Tesla, would like to sell directly to consumers, but a recently passed state law jeopardizes its ability to do so. It’s obvious how this benefits car dealerships but unclear how it helps consumers.
If this state really is going to be “reinvented” and become “Michigan 3.0,” it will need to embrace disruptive change and the technological innovations that drive it. The state swung and missed on Tesla, surrendering to entrenched special interests and raising the cost of Michiganders enjoying the benefits of electric cars. But Gov. Snyder and the Legislature have another at bat. Here’s hoping for a different outcome this time around.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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