BASA Legislative Update

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BASA Legislative Update

• OESCA Fall Conference
• September 14, 2009

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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 Workers compensation budget
• HB 16 Industrial commission budget
• HB 245 Interim state budget

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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

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128th General Assembly
5
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

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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

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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)

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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

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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

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Proposed Legislation 128th GA

• SB 126 Schools report harassment (cont)
• Requires policy to address acts occurring off
  school property if they materially disrupt the
  schools educational environment
• Requires annual training on districts harassment
  policy for district employees and volunteers
• Requires school districts to notify parents if
  annual training is not completed

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Retirement Demographics

• Active Members Average Age
• SERS (2008) 47.6
• PERS (2007) 42.0
• STRS (2008) 44.2
• Active Members Years of Service Credit
• SERS (2008) 9.4
• PERS (2007) 9.5
• STRS (2008) 13.0

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Retirement Demographics (cont.)

• Active Members Annual Earnings
• SERS (2008) 21,322
• PERS (2007) 33,586
• STRS (2008) 53,007
• New Retirees Average Age
• SERS (2008) 62.5
• PERS (2007) 59.0
• STRS (2008) 59.0

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Retirement Demographics (cont.)

• New Retirees Final Average Salary
• SERS (2008) 27,815
• PERS (2007) 45,835
• STRS (2008) 66,823
• New Retirees Average Monthly Benefit
• SERS (2008) 1,095
• PERS (2007) 1,926
• STRS (2008) 3,646

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Retirement Demographics (cont.)

• New Retirees 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

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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...

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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

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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

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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

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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

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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)
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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