With $140 million left on the table after the 2006 session of the Oklahoma Legislature, one lawmaker wants to use half of that money to shore up the Teachers’ Retirement System.
Senator Jay Paul Gumm, a Democrat from Durant, has introduced legislation to take $70 million of the so-called “spillover” dollars and put it into the beleaguered system. That money, left on the table after last year’s budget was written, would give the Oklahoma Teachers Retirement System (OTRS) a much needed shot in the arm.
“Many retired educators have told me they are frustrated and outraged at the way the teachers’ retirement system has been ignored,” he said. “This won’t solve all the problems, but it would give the system added strength at a time when we have resources available.”
As of last year, Teacher’s Retirement System had an unfunded liability of $7 billion – which is more than the state’s annual budget. The weakness in the system led to retired educators receiving the smallest cost-of-living adjustment (COLA) of any group of state retirees.
“Teachers certainly deserved better than that,” Gumm said. “But an agreement to put more dollars into the system got caught up in election politics, which was really a shame because the money was there.”
In addition, the OTRS unfunded liability has affects far beyond the system. The unfunded liability of the system is considered when the state’s bond rating is determined. Just like a poor credit rating increases interest costs for individuals, a poor bond rating increases interest costs for the state’s capital projects. The current estimate is that the OTRS unfunded liability costs taxpayers an additional $20 million per year in interest charges.
“As bad as that is, it is just a side effect,” Gumm said. “The heartbreaking truth is that many Oklahoma’s active and retired educators do not feel as though they can depend on this system in the future. Certainly we owe them better than that.”
The lawmaker said there is no reason to leave this money on the table when the state “has an obligation to our educators that must be met.” He hopes for bipartisan support, which is necessary to ensure its passage.
“In a Senate divided evenly down the middle, it takes support from Democrats and Republicans to pass any legislation,” Gumm said. “This gives us a tremendous chance to put partisanship aside for the greater good of all Oklahomans.
“I look forward to working with members of both parties to send a strong message of support to our educators and of fiscal responsibility to Oklahoma’s taxpayers.”