Prepared Text for Board Meeting – November 26, 2007

Marc A. Schare  614 791-0646 Home

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Tonight, I have a number of legislative updates and one or two other points.

First, I am saddened and disheartened to report that the school funding constitutional amendment is once again on the front burner, at least according to OSBA and OASBO. The amendment, unmodified from the version that we discussed earlier this year,  now has between 170,000 and 180,000 signatures and is targeted for November, 2008. There are only a handful of things that can jeopardize a potential 2009 levy in Worthington, but  passage of this amendment is at the top of the list.

There were a number of issues concerning retirement that were mentioned at the capital conference.

First, a new rule from STRS goes into effect on January 1. The rule (3307:1-11-62)  reads like this:

Effective Jan. 1, 2009, STRS Ohio will only provide secondary coverage to any non-Medicare eligible health care plan enrollee who is employed in a public or private position and is eligible for health care coverage through his or her employer.

It should be noted that in Worthington, we *already* pay the health care for rehired individuals, a practice that is rare at least according to OSBA. If the STRS rule is overturned, perhaps we should consider increasing the taxpayer value of retire-rehire by having the rehired employee use STRS health care rather than district provided health care.

Second, we have discussed HB315, the STRS plan to pay for retiree health care. In particular, we discussed the cost to Worthington of 1.4 million dollars and the cost to Ohio Taxpayers in the aggregate of 250 million dollars. Numerous sources have indicated that HB315 is not likely to garner significant support. If something changes, we’ll let you know.

Third, HB152 would require school boards to offer alternative retirement plans for teachers and school employees. The bill is universally opposed by the education community because of the mandates and associated expenses it would place on local school districts and appears to be dead. The capitalist in me can’t help but think of what might happen if we just gave the 10% employee contribution and the 14% taxpayer contribution over to the employee in some kind of tax deferred account. Over 35 years at 5% interest, every one of our employees would retire with over 1.1 million dollars and that’s probably a worst case scenario.

Fourth, HB240 and HB270 seek to curtail the practice of retire/rehire by making it less attractive for the employee. HB240 seeks to limit the salary of the rehired employee to 60% and require approval for the hire by the state and HB270 would require the rehired employee to forfeit the taxpayer contribution of their pension while employed. Of the two, HB270 has a shot at seeing the light of day, but whatever happens, the volume of activity in this area suggests that at some point, there will be changes to retire/rehire in the state. We as a board should probably work out our own policy vis-à-vis retire/rehire so as to be able to provide clear guidance to our representatives.

Speaking of our representatives, Jeff and I met with Rep. Hughes last week and once again communicated our legislative priorities vis-à-vis school funding. Rep. Hughes indicated that significant legislation is unlikely during the “silly season” that is the 2008 election year which is probably just as well as one of our messages to Jim and the rest of the Ohio legislature was along the lines of – Please God, just leave us alone.

Finally, just today I received my personal Anthem Health Insurance Renewal rate for 2008. Despite my obvious tip-top physical condition, Anthem increased my rate by 14%, a total increase of around $600 per year. Obviously, I’ll be calling three or four competitors tomorrow to see if they can beat this new rate, but it did occur to me that this increase was just about the amount that would be required on your typical Worthington house for that hypothetical 7 mill 2009 levy. I said before that if the 2009 levy is all about employee health care, people might decide that their own health care increase is more important than ours. We can’t let that happen. To that end, I renew my request for a formal board presentation on the process and the timeline our insurance committee intends to follow in the next  year.