LANSING – After weeks of work on legislation designed to prompt the early retirement of thousands of public school employees, it appears Michigan lawmakers finally have reached the critical decision-making point.

Late Wednesday afternoon, Sen. Jud Gilbert (R-Algonac), the chief Senate negotiator on the bill, made a final offer to the top House negotiator, Rep. Mark Meadows (D-East Lansing). But Meadows said he would not take the proposal before the House Democratic caucus because the sides remain too far apart.

That offer includes a multiplier of 1.6 percent of earnings, up from the usual 1.5 percent, sets eligibility for those with an age and years of service totaling at least 80, exempts charter schools and contractors from the retirement system, sets up a hybrid system for new employees and requires all employees to put another 3 percent of their wages into the pension system. The Senate would agree to put that 3 percent into a trust, as the Democratic-run House wanted, but there would be no lifetime health care coverage guarantee as Democrats sought.

The proposal on SB 1227 contains a number of concessions from the original Senate position, which called for no increase in the multiplier. On Tuesday, the Senate agreed to come up to 1.55 on the multiplier and the other measures above.

“What they came back with was a complete deviation from where we had worked to get to,” Marsden said. “We have made the compromises and at some point the House needs to grow up. … We believe what they’re continuing to try to push back is nothing more than special interests trying to get their fingers into this negotiation.”

Senate Republicans had been resistant to increasing the multiplier and that may still be an issue.

“We’ve made this last, best offer knowing full-well there will be members of our caucus that will not be pleased with it,” Marsden said.

Meadows said he did not get the sense from Gilbert that it was the Senate Republicans’ last offer, but realized that was the case after learning of it from the news media.

“I don’t know where we go from here,” he said. “I hope they reconsider their position. As this thing played out, the number one priority in the Senate was to protect charter schools.”

He said compromises have been made on the multiplier issue, as well as House Democrats accepting the Senate’s version of HB 4073 , which creates the health care trust. Meadows said House Democrats would accept the S-2 version of HB 4073 that has been pending on the Senate floor since December.

House Democrats also would accept a hybrid pension/defined contribution plan for new hires proposed by the Senate and to exempt charter schools from paying into the retirement system. But with the Senate couching its offer as its final one, Meadows said he didn’t know how they could move forward.

“They’ve ended negotiations,” Meadows said of the Senate Republicans.

The remaining sticking points are the retirement age for the new hybrid system – the Senate wants 60 while the House wants 55 – and how cost of living increases in the pension system would be handled. There’s also a dispute about whether employees could purchase service credits with House Democrats favoring that idea and Senate Republicans opposed, Meadows said.

House Democrats, unlike Senate Republicans, also want third-party contractors to pay into the pension system. For school employees that retire, but decide to return, House Democrats want them to pay into the system while Senate Republicans object to that language, Meadows said.

The latest counter by House Democrats was to include a 1.6 multiplier for school employees with a combined age and years of service of 80. That would apply to 55,000 employees with about half expected to take the deal.

“There is a difference in view as to what an early out would actually do,” he said.

Other differences remain, including how much of a guarantee for health care employees should receive. Meadows said to him that’s a no-brainer, since schools would be coming through with what they’ve already promised. Plus, he said it’s a good thing for people to have health care coverage.

Meadows said both sides have proposals where school districts would save money all 10 of those years. Originally, the House plan would have cost schools money for a few years.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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