News Story

Public School Administrators Complain About Pension Costs; Don't Offer Solutions

School superintendents across the state are starting to take their message about rising teacher retirement costs directly to parents.

Midland Public Schools Superintendent Michael Sharrow wrote June 16 that retirement costs were costing the district an extra $60 per student.

Farmington Public Schools Superintendent Susan Zurvalec also told parents in a letter the district's budget woes were tied to costs related to the Michigan Public School Employees Retirement System.

Teachers across the state still get traditional pensions as retirement benefits. Other state workers and most people employed in the private sector have 401(k)-type retirement plans. The unfunded liability for teacher pension benefits increased to $25.8 billion in 2013, up $1.5 billion from 2012. 

Zurvalec wrote: "In fact, with the rising cost of the retirement system, which is not under our control, we are actually losing approximately $25 per pupil and not receiving any increase overall." 

But James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy, said school district officials could do more about MPSERS.

"They are absolving themselves of responsibility when they should be the primary voice of reform," Hohman said. "They are the ones who have to pay for school underfunding. While funding ultimately comes from taxpayers, district officials are scraping the bottom of the peanut jar to pay for MPSERS. Instead of doing that, they should be on the record supporting MPSERS reforms."

In 2012, Michigan legislators enacted some reforms to deal with MPSERS’ unfunded liability. For example, employee contributions to the plan were increased, some benefits were limited and new employees were given the option of joining a 401(k)-type plan. Spokesmen for the GOP as well as Gov. Rick Snyder say those reforms are working.

Hohman says closing MPSERS to new employees, similar to what happened to the state of Michigan employees retirement plan is needed. The Michigan State Employees Retirement System (MSERS) was closed to new state employees in 1997. Today, the state offers state employees 401(k)-type plans. Moving state of Michigan employees out of the previous plan has saved taxpayers an estimated $2.3 billion to $4.3 billion.

Sharrow said in an email he wasn't sure where he stood on the issue of MPSERS.

"One of the issues compounding the system is how many present employees are investing dollars into the system," he said. "An easy fix would be to include charter school employees in the system. Changes need to be made and they need to be made for the right reasons and careful thought."

Zurvalec did not respond to requests for comment.

(Correction: The headline on the story has been changed. It previously said superintendents "never" offer solutions. Also, Midland Superintendent Sharrow responded to our request for comment after deadline. His comments have been added above.)

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.

News Story

'He's Just Making That Up' — No Shortage of Attacks In 3rd Congressional District GOP Primary

Congressman Justin Amash vs. Brian Ellis

Kent County business owner Brian Ellis denies that he's the "establishment" candidate in Michigan's 3rd Congressional District Republican Primary race, which pits him against two-term incumbent U.S. Rep. Justin Amash.

Ellis, who founded Brooktree Capital Management and lives in Grand Rapids, has picked up endorsements from a number of "establishment" political action committees including Right-to-Life Michigan PAC, Grand Rapids Area Chamber of Commerce PAC and Michigan Farm Bureau Agri-PAC.

Yet, according to a recent poll conducted by WXYZ-TV and the Detroit Free Press, Ellis trails U.S. Rep. Amash by 20 percentage points.

"Everybody likes to portray their opponent in that way," Ellis said in reference to the "establishment" label. "I support the same great conservative principles the tea parties support: limited government, lower taxes and civic responsibility."

The 3rd District includes Kent, Barry, Calhoun, Ionia and part of Montcalm counties. U.S. Rep. Amash has represented the district since November 2010. He previously served in the Michigan House of Representatives and before that worked as a lawyer for his family's business.

Since taking office in 2011, U.S. Rep. Amash, R-Cascade Township, has not missed a single vote in Congress. He says Ellis clearly represents "establishment" positions.

"He (Ellis) was appointed to the Michigan's Strategic Fund board by Gov. Jennifer Granholm," Rep. Amash said. "While there, he voted in favor of everything for which she asked. He favors corporate welfare. The chambers of commerce aren't endorsing me because they're all for corporate welfare and subsidies, and I am strongly opposed to those things.

"In addition to corporate welfare, he supports Medicaid expansion in Michigan and he supports common core," Rep. Amash continued. "What we have here is a matchup between two very different views of government. It's the kind of race that many people have dreamed of seeing."

In separate interviews conducted over the course of the last two weeks, the candidates disputed the claims made by their opponent.

"On Medicaid expansion I said it was a tough call and I might have supported it," Ellis said. "The governor and the Legislature passed it and I was willing to trust their judgment. But Medicaid expansion was a state issue. The bigger issue is Obamacare. That's what Congress has to deal with and I strongly oppose Obamacare.

"I support local control and, having looked at this (common core) and after talking with many people, I don't believe local control is impinged by it," Ellis said.

Ellis said that Rep. Amash isn't telling the whole story when he attacks him about having been on the Strategic Fund board.

"I was nominated for the board by Republican Senate Majority Leader Ken Sikkema," Ellis said. "When I was on the board the staff only gave us what the Legislature had approved. I'm getting criticized for this but Justin Amash voted to fund the same things we approved."

The Ellis campaign has run ads attacking Congressman Amash on a handful of the votes he's taken.

"He represents himself as one thing in the district, but he hasn't been voting that way and he hasn't been voting the way the district would want him to vote," Ellis said. "He voted against the Balanced Budget Amendment, he voted against the 20 percent tax cut for small businesses and he voted with President Obama on closing the Guantanamo Bay terrorist facility."

Rep. Amash, who explains every vote he takes on Facebook and prides himself on defending the Constitution and limited government, has had well publicized clashes with the Republican establishment. He insists that Ellis has been cherry-picking votes and describing them out of context.

"There were votes taken on two balanced budget amendments," Rep. Amash said. "I voted against the one that would have opened the door for tax increases. It was very poorly drafted legislation. Not only do I support a balanced budget, but I have drafted my own version of a balanced budget amendment."

Ellis said Rep. Amash's approach is unrealistic.

"He says he has a better one, but what good is that if it never sees the light of day?" Ellis said. "If you don't have the cards you can't act like you’re going to get it all and as soon as possible . . . you're just not in position to say 'it's all or nothing.' "

Rep. Amash disagrees and says the eventual advancement of his version of a balanced budget amendment is realistic.

"If we ever get back to taking up the balanced budget debate, it very well could see the light of day," he said.

On his vote against the small business tax cut, Rep. Amash said the legislation was just a political tactic.

"That was a gimmick that would have blown a hole in the budget and I voted against it," he said. "It was meant to appease people. Even the Wall Street Journal opposed that. It was a one-time gimmick, and that's not what we need. What we need is something broad-based, not a political gimmick."

Regarding the Guantanamo Bay facility, Rep. Amash says he doesn't know what Ellis is referring to.

"He's just making that up," the congressman said. "All I can think of is that he is trying to find some way to loosely connect my name to the recent terrorist exchange deal. If it is about moving the detainees from Guantanamo Bay, I think everyone knows we'll have to do that sooner or later. But that's not about releasing them. It's about moving them to some other facility.

"Maybe it has something to do with my opposition to reauthorizing the Patriot Act without first reforming it. The Patriot Act is what the NSA (National Security Agency) is using to spy on ordinary people," the congressman continued. "I think my opponent is the only candidate in the country who supports reauthorizing the Patriot Act without reforms."

From a purely political perspective, the most valuable endorsement Ellis has received could be from Right to Life of Michigan.

"He (Amash) voted against banning gender selection abortions," Ellis said.

The congressman said he voted against the bill because it went beyond the issue of abortion.

"Under that bill a doctor could have been jailed up to a year for simply suspecting another doctor had performed a gender selection abortion and not reporting the suspicions," Rep. Amash said. "So if someone heard part of a conversation at a cocktail party, they'd have to report it. Also, what happens if the Democrats get control of everything at some point? If that happened they could turn something like this around and use it as a precedent for taking actions against pro-life physicians.

"That vote didn't even take place this term," Rep. Amash continued. "I have a 100 percent voting record with National Right to Life. The Right to Life endorsement my opponent has received is purely political. Congressman Fred Upton, R-St. Joseph, has voted against Right to Life 23 times and they just keep on endorsing him."

Ellis has also attacked Rep. Amash for not voting for the Keystone pipeline.

"Every other Republican voted 'yes,' " Ellis said.

Rep. Amash said he didn't vote "yes," because the bill had language in it that he couldn't support.

"I voted 'present' instead of 'yes' because the bill singled out Trans Canada as the only entity that would be allowed to build it," Rep. Amash said. "I believe in our Constitution and the rule of law. I have a rule that I will not vote for legislation that singles out something or someone for special treatment or punishment. Legislation should have general application."

When asked what three things set him apart from Rep. Amash, Ellis stuck to his talking points.

"I would have voted 'yes' on the balanced budget amendment, the Keystone pipeline and the small business tax cut," Ellis said.

In his reply, Rep. Amash focused on his approach to being a representative.

"I am the most transparent member of Congress in history," he said. "I explain every vote and I never miss a vote. I remember reading in Capitol Confidential that Republicans were joining Democrats in voting for corporate welfare. That's what got me interested in running [for office] in the first place."

Editor's note: Michigan Capitol Confidential will be reporting and writing about key primary races leading up to the election on Aug. 5. The series of stories are designed to provide readers with some insight into candidates who have said they support free market issues. The stories are not endorsements and readers are encouraged to give every candidate a serious look before the election. 

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.