For Immediate Release: February 22, 2007
Senator Mike Mazzei
Senate Committees Approve Bills to Shore up Teachers’
Two bills aimed at shoring up the Teachers’
Retirement System of Oklahoma (TRS) are now headed to the full
Senate for consideration. Sen. Mike
Mazzei is the author of the measures, each of which would
substantially reduce the 49 percent unfunded liability rate
in the system within the next two decades. Combined, the bills
would accomplish that feat in about half the time.
SB 1092 was approved by the Senate Retirement and Insurance
Committee on Thursday. Mazzei explained the measure would increase
the monies that the state, in combination with the school systems,
puts into TRS. The increased employer contribution would be
contingent upon available state dollars to cover that cost.
Currently, the rate is 8 percent for common education employers,
as well as two-year colleges and state agencies in the system.
Four-year universities and colleges currently contribute 7.05
“Under SB 1092, the rate will be increased to 8.75 percent.
That will infuse the retirement system with $36 million a year,
which will grow as teacher salaries increase,” said Mazzei,
R-Tulsa. “This adjustment could get the teacher retirement
system on the path to being around 80 percent funded in 20 to
The second measure, SB 1119, was approved by the Senate Finance
Committee on Tuesday. That measure would raise the dedicated
stream of revenue from income and sales tax collections to pour
additional money into TRS.
“SB 1119 incorporates an excellent idea from Treasurer
Scott Meacham to take the dedicated level from 4.5 percent to
6.5 percent by fiscal year 2011. That will pour an additional
$27 million a year for each half a percent incremental increase,”
Mazzei said. “Over time, that additional infusion will
get the teacher retirement system up to an 80 to 81 percent
funded level in about 18 years.”
Mazzei said if both measures were enacted, it would produce
a huge stimulus into the system that could help TRS reach an
80 percent funded rate in approximately 10 to 12 years.
“That would be incredible. Such immediate progress should
probably improve our state’s bond ratings which would
ultimately save even more dollars,” Mazzei said. “But
more than that, it will ensure that we will honor Oklahoma’s
promises to thousands of men and women who dedicated their lives
to education in our state.”
On the other hand, if no definitive action is taken by lawmakers
and the governor, Mazzei said the result would be nightmarish—not
only for retired teachers, but for the economy of the entire
“We could find ourselves in a position of having to drastically
cut areas of the budget, or face huge tax increases which would
devastate the economy and drive capital out of the state,”
Mazzei said. “In West Virginia, they finally got to the
point of no return. They didn’t want to cut the budget,
and they didn’t want to raise taxes, so they ended up
borrowing $4 billion. As a sad result, 10 percent of their general
budget every year goes just to making their interest payments.
Those are about $700 million a year. Fortunately, if we take
action now, we still have time to avoid those scenarios.”
Both bills now move to the full Senate for further consideration.
For more information contact:
Senator Mazzei's Office - (405) 521-5675