Governor Forrest H. (Fob) James is making a third attempt to revise the retirement systems for state teachers and employees. However, once again, teachers and employees are opposing the proposed changes. In previous regular and special sessions, Governor James had lawmakers introduce slightly different bills to reduce employee payments and benefits. He has now called for another special session on June 21 to request changes in the retirement systems, an expansion of the state textbook committee, and a strengthening of the state’s criminal code. The Alabama Education Association (AEA) and the Alabama State Employees Association are both against any alterations to the state pension plans.
In a letter to members that was featured on the front page of the Alabama School Journal, the AEA newspaper, AEA’s executive secretary, Paul Hubbert, urged members to prepare to lobby against the bill. Additionally, a pamphlet outlining 17 reasons to oppose the measure was included in the newspaper. Currently, the employees’ and teachers’ retirement systems have separate boards of directors. However, contributions, retirement formulas, benefits, administrative offices, and officers are the same for both systems.
Governor James is proposing these changes to reduce the state’s expenditure on pensions. He claims that the state’s payments into the retirement system have increased from $9 million in 1960 to $225 million in 1982. He believes that Alabama could save $40 million next year if the pension changes are implemented. The governor states that the state currently allocates 15 percent of its total revenue to pay retirement and Social Security benefits for teachers and other state employees, but it should only spend around 10 percent of that revenue. Under his plan, current employees would have the choice of remaining under the existing pension plan or switching to the new one. Individuals employed after October 1, 1982, would automatically join the new plan.
Currently, employees contribute 5 percent of their annual salary to the retirement plan, and benefits are calculated based on years of service and a formula. Governor James wants to reduce the employee contribution rate to 3.5 percent of salary and adjust the formula factor to 1.4 percent. Current employees would have three options: stay in the current plan, agree to change plans and receive half of their contributions plus interest, or agree to change plans and receive a refund of all contributions plus interest made before October 1.
Governor James contends that retirement is the area where the cost of state government becomes inflated and can only be addressed by the state legislature. He has scheduled the special session at the same time as most legislators are qualifying for re-election. Both Mr. Hubbert and Governor James view the proposed changes as a campaign issue. While the employee and teacher organizations are urging candidates to oppose the measure, Governor James is traveling the state, encouraging candidates and the public to support it. If legislators prioritize campaigning and adjourn before considering the bill, the Governor has vowed to call them back repeatedly until they act on it. Mr. Hubbert, who chairs the Teachers’ Retirement System board, challenges the Governor’s perspective by asserting that the operating costs of the current plan are starting to decrease. He cites a $7.2 million reduction in the state’s allocation to teacher retirement for the 1982-1983 year and a decline in the percentage of payroll going towards retirement, from 15.5 percent to 11.98 percent.
Furthermore, Governor James is also attempting to enlarge the state’s Textbook Committee, a move that has sparked disagreement within the education community. His previous bill to do so failed during the regular session. The Governor wants to appoint 14 laymen to the committee, subject to confirmation by the state Senate. He also wants the state board of education to appoint 14 educators. Currently, the state board appoints 14 educators, and the governor appoints two laymen. However, both the AEA and the state department of education are against this proposal. State Superintendent of Education Wayne Teague believes that the textbook-selection process is functioning well and that the Governor does not need to expand the committee to increase public involvement. Mr. Teague mentions that, last year, the state board started placing copies of proposed textbooks in various locations throughout the state. The textbook committee also held public hearings in four cities before making their final decisions.