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By killing teacher pensions and striking sweetheart deal, lawmakers go full on Orwell

Jul 14, 2017

George Orwell’s classic Cold War novel 1984 depicted a world where everything was controlled by a nightmarish dictatorship where history was constantly being rewritten to suit the needs of the moment, and where the meaning of words was turned into their opposite: War is Peace, Ignorance is Strength, et cetera. I was reminded of that yesterday, when I got an Orwellian press release from the governor’s office.

The headline said “Gov. Rick Snyder signs legislation that protects retirement benefits of school employees (and) reduces financial risks for taxpayers.”

Actually, the bill does exactly the opposite.

It further weakens and virtually does away with teacher pensions, a move that costs the state money instead of saving it.

Ironically, Snyder never wanted this bill.

Teachers who had served a certain number of years used to get full pensions. However, this led to $29 billion in unfunded liabilities for which the state is still responsible. Snyder then helped craft a new “blended” pension plan that was a combination of a smaller traditional pension and 401(k) plan.

... the Republican majority in the Legislature really seemed to have it in for teachers

This plan was solvent and fully funded. But the Republican majority in the Legislature really seemed to have it in for teachers, and Senate Majority Leader Arlan Meekhof said he’d refuse to pass a budget unless they got rid of the last remnant of teacher pensions.

Snyder eventually agreed on a compromise, which is what the bill he signed yesterday was. They want to force new school employees into a pure 401(k) plan, so they are closing the current hybrid plan. As a move that allows Snyder to save face, they are creating a new hybrid plan that will cost teachers more, and which the state can later kill by reducing its funding.

By the way, doing all this doesn’t save the state any money or do a thing about the $29 billion in unfunded pension liabilities. In fact, it will cost taxpayers at least $255 million to make the switch. But this is evidently worth it to the ideologues who hate teacher pensions.

That wasn’t the only Orwellian thing to come out of Lansing yesterday.

Five years ago, Snyder told me he killed incentives for Michigan’s budding film industry because he didn’t believe in picking winners and losers, and wanted to treat all businesses the same.

Ask yourself, "is this how government is supposed to work?"

Well, that policy is down the memory hole now. Yesterday, the governor celebrated passage of a new package designed to bring a Taiwanese electronics firm called Foxconn to the state, where it is supposed to create 5,000 jobs.

What’s stunning about that is this: Foxconn and any other businesses that create a certain number of jobs will be allowed to deduct their employees’ state income taxes and keep them, instead of sending the money to Lansing.

This certainly gives new meaning to the concept of the corporate state. I almost wonder whether if a huge new factory farm complex came to Michigan, we’d allow them to treat agricultural employees as serfs, or possibly sharecroppers.

Well, that may be absurd. But the idea of allowing a private employer, and a Chinese one at that, to confiscate the state income taxes their employees have to pay would have sounded just as far-fetched a few years ago.

Ask yourself, “is this how government is supposed to work?”

You can probably guess my answer.

Jack Lessenberry is Michigan Radio’s Senior Political Analyst. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.