The Fix Is In

Dark of Night

You don’t have to go to Washington DC, or New York City, or even to Mar-a-Lago, to find government corruption.  Just take a drive west down Broad Street from here in Pataskala.  When you reach “the end”, Broad and High in downtown Columbus, Ohio, look to the left, at the State House.  Because it’s right there that the “fix” is in.

It doesn’t take much imagination to figure out the legislators know what they are doing is “shady”.  When you slip in a major change and take away representation for 500,000 some Ohioans in the dead of the night (approximately 1:13 am), you know that they know: their actions won’t stand the light of day. 

But that’s what happened in the wee hours of Wednesday morning.

The Ohio Legislature, both House and Senate, really don’t give a damn about the will of the voters. That’s not an opinion, it’s a fact.  Look at their blatant defiance of two separate Ohio Constitutional amendments passed by the voters to curb gerrymandering.  Add to that, the current discussion about banning abortions (making it criminal murder) despite the overwhelming majority of voters approving a Constitutional Amendment protecting abortions rights just in 2023.  And they are “tinkering” with the marijuana legalization law passed by referendum as well, finding ways to make more money from this newly legal vice.

So what happened in the dead of night Wednesday?  At the final moment, when no one could object, the leaders of the legislature placed an amendment in the omnibus state budget bill.  That amendment changed the makeup of the governing board of the State Teachers Retirement System (STRS).  

The Board

Currently, the Board that controls the pension fund, consists of Five representatives selected by active teachers, Two representatives selected by retired teachers, and an Appointee from each the Governor, the Legislature, the State Treasurer and the Department of Education.   But Wednesday morning, in the dark, without debate or discussion, the Five active teacher representatives were cut to Two, and the Two retired representatives replaced by One. Those four were replaced by four more appointees of the legislature and executive.  

The powers-that-be in the legislature don’t want what’s going on at STRS to see the light of day.  So their answer was to make sure the “owners” of the pension; the teachers, professors, and administrators whose hard earned money make up the pension fund, had their voice stripped away.

Ride the Wave

What’s going on?  Like any pension fund, STRS has to “ride the wave” of economic ups and downs.  But, if you look at the long term performance of the fund, it has failed to keep up with even a simple “index” of the stock exchanges.   STRS spends hundreds of millions of dollars on  in-house investors, and it also invests billions of dollars with private equity firms.  Those “private” investments are “secret”.  The “owners” of the money, teachers and retirees, are not allowed to see what the cost and benefits of those investments are.  Meanwhile, their retirement benefits have been cut back, year after year, since 2013.  

Retirees were told over and over that they were in the “Premier Retirement System in the Nation”.  But, they found that the promised cost of living adjustments were cut, and that the “wonderful insurance plans” cost more and more.  And active teachers were told they had pay more into STRS, teach longer, and get less retirement benefits.  They all asked why, after the stock market more than doubled, there wasn’t enough money?  They were told, “That’s just the way it is”.

All About the Green

Over the past several years, groups of retired  and active teachers organized.  They defeated the Ohio Education Association endorsed elected board members, and replaced them with reformers dedicated to transparency and improving benefits both for active and retired teachers.  Just last year, the “reformers” achieved a majority of the Board.

First the Governor, then the Attorney General of Ohio threw legal road blocks up to stop the reform board. And, now when the courts cleared those hurdles, the Legislature stepped in to “change the rules”.  

Why does the legislature care about all of this?  It’s simple:  private equity firms are huge financial supporters of politicians (on both sides).  If the STRS pension fund is taken out of private equity investments, then the legislators will lose a large source of their financing.  It’s all about “the green”, not in the pockets of teachers or retirees, but in the pockets of the “suits” in the State House.

Where is the outcry against this power grab?  The media is mixed:  the largest “voice” in the state, Gannett Media, has a financial stake in the pension fund.  They don’t want changes, and their reporters continue to repeat false accusations about the reformers.  On the other hand, Nexstar’s WCMH in Columbus, led by Colleen Marshall’s reporting, continue to be strong investigators on the STRS story, as does the Toledo Blade newspaper.

Angry Teachers

And the Governor could veto this item in the budget – but don’t count on it.  His hand is in this financial cookie jar as well, and he’s already shown his “colors” in this effort.  He’s likely to go along with disenfranchisement.  After all, he’s retiring to Cedarville soon.

There is one “mistake” that the leaders of the state legislature made.  Since 2009, the legislature has been “cushioned” from changes in STRS.  They gave up their direct control of pension funds. It was all about “the Board”, not the “suits” in the State House. Now, after this move, “the suits” directly face 500,000 teachers and retirees. For them, it’s “all about” the Legislature.  And, as any fourth grader can tell you, there’s nothing worse than a whole lot of angry teachers.

More to come.