Measures Would Ban Steve Cook-Style Schemes

A pair of bills currently in the Senate would prohibit schemes that require taxpayers to pay for work done by real or putative school employees on behalf of unions. Both measures are sponsored by Sen. Marty Knollenberg, R-Troy, and were approved by the Senate Education Committee on June 17.

Senate Bill 279 would outlaw pension spiking of the type Michigan Education Association President Steve Cook is using to pad his taxpayer-funded pension. Michigan Capitol Confidential broke the story about how, beginning in 1993, Cook has been permitted to accrue higher benefits from the school employee pension system, even though he has been working as a full-time union official. The arrangement lets Cook use his $201,613 MEA salary as the basis for calculating his public employee benefits.

In addition to the pension contributions the school district makes on Cook’s behalf (whether reimbursed by a union or not), the state is directly paying more than a quarter of the system’s annual costs. Due to chronic underfunding of the pension system, taxpayers are at risk for future costs that Cook’s benefits incur. Actuaries estimate that school employees are promised $63.8 billion worth of pension benefits, but only $38.0 billion has been set aside to cover these.

Cook’s situation wouldn’t be affected by Senate Bill 279, but the bill would prohibit such schemes in the future.

Senate Bill 280 would ban school employee union contracts that contain “release time” provisions that stick taxpayers with the tab for time some employees spend on the job conducting union business.

In 2011, documents obtained by Capitol Confidential showed that taxpayers were spending millions of dollars on these arrangements. Thirty-nine districts had employees who were released from their normal job to spend at least half their time working for the union at a cost of at least $2.7 million.