The opening of the 2009 legislative session saw our state reeling from the same financial crisis gripping the nation and having to make up $350 million in this year’s budget and a similar amount in next year’s budget. The 1/20/09 legislative start already had public school employees in a precarious position. There were proposals for immediate changes to the retirement system along with retiree health care. There was a proposed 10% increase in health insurance premiums and there were proposals to cut a paid work day and increase class size.
By the time we met for our annual legislative training on 1/28/09, we were hard at work pushing the new funding formula bill and the means with which to raise the needed dollars. We were also busy stemming the tide on many of the negative measures, and with your help, we were able to redefine the majority in a manner which will allow us to be IN the room as decisions are made. As is the case when 60 days are allowed for legislative action, other unexpected bills popped up. There was one for tuition tax credits and another which would have negatively impacted our employee rights section of the public school code. Add to this, various bills on the same issues, each with their own unique twists and a continually worsening financial picture and this 60 day session was frustrating, exasperating, and tough. However, we stayed through the end and managed to soften, tweak, and modify a few of the proposals which passed.
Here is a topical review of what passed and didn’t pass:
RETIREMENT/RETIREE HEALTH CARE/RETURN TO WORK
Three bills dealing with these issues passed and are on the Governor’s desk at this writing (check www.nea-nm.org for the latest information on gubernatorial actions.) These bills change retirement for new employees from full retirement at any age after 25 years to full retirement at any age after 30 years. They also change the rule of 75 (retirement when age and service equal 75) to a rule of eighty; again only for new employees. We and other public employee unions, notably AFT New Mexico and the American Federation of State, County, and Municipal Employees, worked to postpone any changes until at least July 2010, which all the bills accomplish. Originally all the bills changed new employee benefits from a 25 year retirement to a 30 year retirement and the rule of 75 to 80 for new employees as of July 1, 2009 as well as well as containing some initial more punitive measures. These were all modified to a staring date of either 2010 or 2011 depending on which bill you are reading. The bill we prefer, HB 573, is the one we helped modify which calls for NEA-NM, along with other employee unions to participate in a task force to investigate any and all options to insure the long-term solvency of the Public Employees Retirement Association, the Educational Retirement Association, and the Retiree Health Care Authority. There was agreement that all options were on the table, including repealing the changes in new employee eligibility if better more actuarial sound options could be developed. Our work with the other unions has already produced some options which we believe make the systems more actuarially sound with less harm to employees. These options might still include the change to a 30 year retirement if other options are not actuarially sound. The proposed task force is charged to issue a report back to legislative interim committees by October 1, 2009 in preparation for the 2010 legislative session.
As for Retiree Health Care, beginning in July 2010 employee and employer contributions will gradually increase over a 3 year period to keep the fund solvent through 2027. Our retired colleagues have already seen drastic premium increases and benefits decreases over the last 18 months in order to keep the RHCA afloat after years of underfunding. This is a health benefit we fought long and hard to acquire in 1990 and one we do not want to lose when we retire and need it most.
Return to Work changes have mostly been made to state, county, and municipal employees as the media coverage during the session turned legislators’ attention to the outlandish examples of double-dipping and rule bending on the off time required before returning to work. School employee Return to Work stays basically the same and any changes in the sunset date for it will depend on which bill(s) the Governor signs and in which order he signs them. (Last one signed is the one that becomes law.)
The most disconcerting bill dealing with our retirement was HB 854 which was put in as the final $42 million patch to balance next year’s budget. These $42 million will be paid by employees into their retirement as opposed to coming from the state through the public employers for the next two years. This is a 1.5% cut to employees making more than $20,000. Legislators tried to rationalize this pay cut by saying public employees had to feel the pain, public employees were really paying themselves, and public employees were really still coming out on the positive by a couple of dollars each paycheck once the federal stimulus package starts cutting federal income tax withholding on paychecks this spring. Our arguments that it negates the entire concept of the stimulus package by taking $42 million out of the hands of working people who would use it for buying food, gas, and clothing fell on deaf ears for the most part. At this writing, we are still urging the Governor to reinstate the 1.5% for school employees through his jurisdiction over the federal education dollars coming to NM. The fact that the federal change in tax rates will soften this blow (by pretty much holding take-home pay harmless) through December 2011, doesn’t change the fact that it remains a blow to public employee earning power!
NEW FUNDING FORMULA
The new funding formula and the means to pay for it made it through the House of Representatives where courageous House members stood by their belief in our schools even though they are up for re-election next year. NEA-New Mexico and our other Education Partners commissioned a poll during the session to gauge New Mexico voters support for the funding formula and a ¾ cent increase in the gross receipts tax to pay for it. It was gratifying to see that even in tough times 59% of those polled supported both the formula and the funding; and when told of the impending cuts in next year’s school budgets, support went up to 64%.
This public support did not sway the Senate; once again, the formula and its funding mechanism were banished to committees where they were sent to die-a death that came to pass 3 days before the end of the session.
PROPOSALS THAT DIDN”T PASS
The idea of cutting a paid day of work was quickly dismissed after our initial disapproval.
The idea to raise class size did not gain any traction once we pointed out how counter productive it would be to all we’ve accomplished in the last few years.
The yearly push to pass tuition tax credits for students attending private schools died in a Senate Committee after much work by NEA-NM.
A proposal to negatively change our due process rights kept moving along through the House and finally died on a Senate committee table one step away from the Senate floor on the last night of the session, again after much work by NEA-NM.
The proposal to increase health insurance premiums by 10% was abandoned for changes to our health benefits by PSIA which will mean lower premium costs for all employees, but higher costs for those in need of medical services. (Check the NMPSIA website for more information).
The financial picture for the state worsened during the session resulting in another $150 million having to be pared off next year’s budget. There is almost certainty of a special session in late summer/early fall to gauge the latest revenue estimates and the effects of the stimulus package to positively affect job retention and job growth. Our job is to continue working with the Governor on how best to channel the education stimulus dollars, working with you on how to influence your district in their use of stimulus dollars and in all of us working with the 113 decision makers while they are NOT gathered in session to make our case for investing in our public schools and not retreating from what is our Constitution’s mandate.
