News Story

'Steve Cook' Bill Would Prevent Private Union Employees from Spiking State Pension

MEA president is basing public pension on $200K union salary

Two months ago, Michigan Capitol Confidential broke the story that the Lansing School District had allowed the president of the state's largest teachers union to remain on its payroll for years as part of a “pension spiking” scheme.

Last week legislation was introduced in the state Senate to prohibit such schemes.

As reported by Michigan Capitol Confidential, under an arrangement with the Michigan Education Association, the Lansing School District contributed $51,976 annually to the state-run school pension system on behalf of union president Steve Cook, and was then reimbursed by the MEA. The deal will let Cook collect a much larger pension from the school retirement system that is currently underfunded by $26 billion.

“While Steve Cook’s gaming of MPSERS was not illegal, it certainly was unethical,” said Sen. Marty Knollenberg, R-Troy, the sponsor of the legislation. “Cook enriched himself at the expense of our teachers’ retirement. It’s time to close this loophole to make sure MPSERS benefits go to those intended — our public school teachers and employees.”

Knollenberg's legislation, Senate Bills 279 and 280, is aimed at prohibiting such pension spiking deals, and would also ban school union contracts that pay employees who are union stewards to do union work on school time (a practice they call “release time”). In many public school districts, local union officials collect a full teacher's salary and benefits but are not required to teach or perform any other educational function.

As a state representative in 2011, Knollenberg introduced a version of this second bill after learning that 25 of the 28 school districts in Oakland County had either a full-time or part-time employee being paid with taxpayer money to perform union activities. That legislation (House Bill 4059 of the 2011-2012 session) was passed by the House with a 59-47 margin but was never taken up by the Senate despite a 26-to-12 Republican majority.

The current bills each have 14 cosponsors, a solid base of support to start out with considering that 19 “yes” votes are needed for passage in the Senate. Senate Bill 279 has been assigned to the Senate Appropriations Committee, which is chaired by Sen. Dave Hildenbrand, R- Lowell. Senate Bill 280 has been assigned to the Senate Commerce Committee, which is chaired by Sen. Wayne Schmidt, R-Traverse City, who voted for House Bill 4059 in 2011.

“Each dollar these school districts spend on union lobbyists is a dollar taken from classrooms,” Sen. Knollenberg said. “The last thing parents and taxpayers should have to worry about is whether money is being siphoned out of classrooms to pay for lobbyists.”

MEA spokesperson Nancy Knight didn't return a phone message seeking comment.

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.