BASA Legislative Update

OESCA Fall Conference

September 14, 2009

128th General Assembly

• To date, a total of 9 pieces of enacted legislation

• Required legislation included:– HB 1 – Biennial budget– HB 2 – Transportation budget– HB 15 – Worker’s compensation budget– HB 16 – Industrial commission budget– HB 245 – Interim state budget

128th General Assembly

• “Other” legislation enacted included:– HB 67 – Blood donation by minors with parent

consent– SB 73 – Coal mining laws– SB 79 – MR/DD name change– HB 150 – Ohio military family month

• Criticism over lack of legislation

128th General Assembly

128th General Assembly

• However, criticism may be misguided• House has introduced: 276 bills; 27

concurrent resolutions; and 3 joint resolutions

• Senate has introduced: 165 bills; 18 concurrent resolutions; and 6 joint resolutions

• BASA currently monitoring 90 separate pieces of legislation

128th General Assembly

• Legislation rolled into HB 1 and HB 2– HB 4 – Interactive distance learning– HB 26 – Corporal punishment– HB 165 – Education for military children– SB 2 – Federal infrastructure funding– SB 12 – All-day kindergarten– SB 111 – Personal property tax losses– SB 115 – Education for military children

Proposed Legislation – 128th GA

• House Bill 60 – School nutrition standards– Would specify “nutritional limits” for vending

machine foods and beverages– Would add “body mass index & weight status

category” to list for kindergarten screening unless parent does not wish it

– Would require physical education (defined as “at least thirty minutes of moderate to rigorous physical activity per day, exclusive of recess in grades kindergarten through twelve”)

Proposed Legislation – 128th GA

• House Bill 260 – Election Law– Would permit applications for absent voter

ballot by electronic mail– Would permit single request for absent voter

ballot for all elections during calendar year– Expands election costs to local political

subdivisions to include overtime– Would eliminate special elections

Proposed Legislation – 128th GA

• SB 126 – Schools report harassment– Prohibits school administrators from

knowingly failing to report to law enforcement authorities menacing by stalking or telecommunications harassment occurring on school grounds

– Requires boards to adopt policy on bullying by electronic means

Proposed Legislation – 128th GA

• SB 126 – Schools report harassment (cont)

– Requires policy to address acts occurring off school property if they “materially disrupt” the school’s educational environment

– Requires annual training on district’s harassment policy for district employees and volunteers

– Requires school districts to notify parents if annual training is not completed

Retirement Demographics

• Active Member’s Average Age– SERS (2008): 47.6– PERS (2007): 42.0– STRS (2008): 44.2

• Active Member’s Years of Service Credit– SERS (2008): 9.4– PERS (2007): 9.5– STRS (2008): 13.0

Retirement Demographics (cont.)

• Active Member’s Annual Earnings– SERS (2008): $21,322– PERS (2007): $33,586– STRS (2008): $53,007

• New Retiree’s Average Age– SERS (2008): 62.5– PERS (2007): 59.0– STRS (2008): 59.0

Retirement Demographics (cont.)

• New Retiree’s Final Average Salary– SERS (2008): $27,815– PERS (2007): $45,835– STRS (2008): $66,823

• New Retiree’s Average Monthly Benefit– SERS (2008): $1,095– PERS (2007): $1,926– STRS (2008): $3,646

Retirement Demographics (cont.)

• New Retiree’s Years of Service Credit– SERS (2008): 22.2– PERS (2007): 24.4– STRS (2008): 30.2

• The Public Perception

• Schoolfunding article (September 2009)– The national picture– Possible effect on retire/rehire

The STRS Proposal

• BASA has participated in the process• BASA has not endorsed this proposal• Objective: to preserve defined benefit plan• STRS statement to ORSC: “If no changes

are made, STRS Ohio will eventually be unable to pay future benefits. The retirement Board as staff, as fiduciaries of the system, must make changes that help ensure the long-term solvency of STRS...”

The STRS Proposal

• Increase in contributions– Members: 0.5% per year, beginning 7/1/11,

for five years– Employers: 0.5% per year, beginning 7/1/16,

for five years

• Final average salary calculation– Based on five highest years of earnings

beginning 8/1/15

The STRS Proposal

• Change in eligibility for retirement, beginning 8/1/15– Retire at any age with 35 years of service– Retire at age 60 with 30 years of service– Retire at age 65 with 5 years of service– Can retire earlier with “actuarily reduced” benefit at

age 55 with 30 years of service

• Members who meet age and service eligibility for service retirement as of 7/1/15 under existing rule retain eligibility

The STRS Proposal

• Change in benefit formula (effective 8/1/15)– 2.2% per year for first 30 years of service– 2.5% per year for each subsequent year– 35-year enhanced benefit eliminated– Transition benefit: members eligible for

retirement on 7/1/15 but retire on or after 8/1/15 will receive no less than what they would have received on 7/1/15

The STRS Proposal

• Reduction in cost of living allowance– Current retirees would have COLA reduced

from 3% of FAS to 2%, effective 7/1/11– Members retiring after 7/1/11 would receive

1.5% COLA each year

• Proposal would bring STRS funding period from current status of infinity to 33.4 years

• Proposal does not address health care issue

GRF Revenues – Actual $ Received Comparing 08/09 with 08/08

$ in thousands

Category Actual FY10 per 08/09 Actual FY09 per 08/09 Difference

Non-Auto Sales $ 1,015,388 $ 1,148,835 $ (133,448)

Auto Sales & Use $ 169,973 $ 175,091 $ (5,118)

Subtotal - Sales $ 1,185,361 $ 1,323,927 $ (138,566)

Personal Income $ 984,568 $ 1,087,027 $ (102,458)

Corporate Franchise $ (13,778) $ 29,753 $ (43,531)

Public Utility $ 34,114 $ 47,387 $ (13,273)

KWH Tax $ 25,560 $ 22,642 $ 2,918

Foreign/Domestic Insurance $ (232) $ (656) $ 424

Other Business $ 97 $ 246 $ (149)

Soft Drink/Sin Tax $ 117,211 $ 120952 $ (3,741)

Estate $ 238 $ 1,082 $ (844)

Total Tax Receipts $ 2,333,140 $ 2,632,360 $ (299,220)

GRF Revenues – Actual $ Received Comparing 08/09 with Estimates

$ in thousands

Category Actual FY10 per 08/31 Estimated FY10 per 08/31 Difference

Non-Auto Sales $ 1,015,388 $ 1,039,400 $ (24,012)

Auto Sales & Use $ 169,973 $ 160,400 $ 9,573

Subtotal - Sales $ 1,185,361 $ 1,199,800 $ (14,439)

Personal Income $ 984,568 $ 948,700 $ 35,868)

Corporate Franchise $ (13,778) $ (9,500) $ (4,278)

Public Utility $ 34,114 $ 46,200 $ (12,086)

KWH Tax $ 25,560 $ 30,100 $ (4,540)

Foreign/Domestic Insurance $ (232) $ (700) $ 468

Other Business $ 97 $ 300 $ (203)

Soft Drink/Sin Tax $ 117,211 $ 109,600 $ 7,611

Estate $ 238 $ 1,000 $ (762)

Total Tax Receipts $ 2,333,140 $ 2,325,500 $ 7,640