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Governor Mike DeWine takes an action down three times in 50 years to fix the Biden ballot situation, and the turmoil of the state teachers pension fund has sparked a lawsuit and a board reshuffle.

But a retired teachers group says they've been sounding off on this for years.

More on that this weekend.

The state of Ohio.

And the.

Welcome to the state of Ohio.

I'm Karen Kasler.

Governor Mike DeWine leaned on a distinctive chief executive power Thursday evening, ordering state lawmakers back to Columbus for a special session on Tuesday.

The purpose of this session will be for the General Assembly to pass legislation ensuring that both major presidential campaigns would be on the Ohio ballot in November, as well as legislation that worked for him.But campaign spending wipes warned that.

Ohio is the only state with a certification deadline before the Democratic convention that has not come up with a workable fix.

DeWine used the opportunity to blast Super majority Republicans in the House for not passing legislation on Wednesday.

That would have done both of the things he wants.

The Senate has passed several bills that would remedy this situation.

Howard, the House of Representat The legislature has session yesterday and again fail to take any action.

This is simply unacceptable.

Ohio is running out of time to get Joe Biden, sitting president of the United States, on the ballot this fall.

Failing to do so is simply not action.

This is a ridiculous this is absurd situation.

There are at least four bills that ban contributions by foreign nationals to ballot issue campaigns, with one that includes the Biden ballot fix.

Senate President Matt Huffman had this explanation this week about why this process has been difficult.

There are a lot of people who simply weren't going to vote for a freestanding bill that put Joe Biden on the ballot.

And, you know, for whatever, whatever their reason or whatever their logic would be.

And, you know, we came together and said, look, you know, we think this, foreign money needs to be out of these statewide elections.

and we think that and ultimately, if, as I've said many times before, this is going to happen through court or some other way.

I think the legislature should be doing it.

I think Frank Laroche thinks that this is a good way to get both of these things taken care of.

A Huffman spokesman said he'll encourage a vote on a bipartisan House bill to allow candidates to pay for child care with campaign funds.

Senate Republicans passed it May 8th, with the other two provisions attached.

But Democrats say these proposals are designed to make it harder for upcoming ballot issues on redistricting and raising the minimum wage to raise money.

After Republicans lost two ballot issues last year.

These are attempts at trying to change the way our ballot initiatives are funded.

The bottom line is there are sore losers.

They didn't win those ballot initiatives that they are trying to do everything possible to, to sabotage the next ballot initiatives.

And this is just one more way to do that.

It's an 11th hour attempt.

I think it's a sore loser attempt one more time.

The last time an Ohio governor called a special session was in December 2004, when Republican Bob Taft ordered lawmakers to deal with a campaign finance reform bill.

The time before that was 1973, and it was also on campaign finance reform.

Ohio's ballot deadline is August 7th.

Ohio and Washington are the only two states where this year's presidential ballot deadline is before the Democratic convention, set for August 19th through the 22nd.

Lawmakers and deeply read Alabama unanimously passed a legislative fix to move their deadline earlier this month.

The Republican dominated Ohio Supreme Court has denied a request from Republican Attorney General Dave Yost to overturn a Franklin County judge's order that blocks a law banning gender affirming treatment for minors and trans athletes and girls sports.

The court's seven justices unanimously agreed on denying the emergency request to let House Bill 68 take effect before a trial in July.

But a spokesperson for Yost noted that four justices shared his concern that one judge can issue an order that affects the entire state.

The ACLU's Fred Levinson says a trial needs to determine if the law violates the Constitution's single subject rule.

As the judge suggested, it does so for the state to ask for it to go into effect before that trial was, quote, egregious.

The ACLU of Ohio sued over the law on behalf of 212 year old transgender girls, saying House Bill 68 would cause them to lose access to necessary medical care.

Yost also spoke out this week on the lawsuit he's filed to remove two members of the board of the state Teachers pension Fund.

Those members are supported by retired teachers who have battled with the state teachers Retirement System, which reduced and then suspended their cost of living adjustments for years before restoring a 1% Cola last May.

I do hope that the board recognize that there are some serious considerations here that we're trying to protect.

the the retired teacher, retirees, and the system, and that they will be cautious about proceeding down, the road that these two folks want, but.

Well, let me add, one additional thing.

I'm angry that we've got five retirement systems who participate in the same stock market, and four of them had cost living increases over the last five years.

Stress didn't.

Those are fair questions.

There is something that's not right in the state of Denmark, but steering a public contract and having back door, that fixes is not the right way to fix it, but it does need to be fixed and the teachers deserve some answers.

I intend to get them working.

Yost is suing to remove newly installed STRs chair Rudy Victim Balm and board member Wade Steen, saying they're trying to put a private investment company in charge of two thirds of a $90 billion in the stress fund for their own benefit.

The lawsuit was sparked by an anonymous letter governor Mike DeWine received expressing concerns about connections between Steen, Fact and Bomb, some former board members, and QED, a private investment company with no track record and a risky strategy.

It's suspected the letter was written by Astra staff.

There was one group with a real concrete interest in this complicated saga.

The fund's more than 150,000 retirees, who get an average of $4,100 a month and don't get Social Security.

Many of them have backed board candidates who want more transparency and changes to the fund.

Robin Rayfield retired from the Pike Delta York local school District in northwest Ohio in 2011.

He estimates around $35,000 in lost benefits since then.

He is now the executive director of the Ohio Retirement for Teachers Association, which raised $75,000 to hire a forensic investigator to look into The Actors Fund in 2021.

We want to see a restoration, at least a pathway to restoration, at least a, designed, roadmap with benchmarks on it that we could say, we're making progress.

You know, we're not getting a 3% cola.

We're getting a 1% cola, or we're not getting a, we don't have to work 35 years.

We only have to work 34 or 33.

And so we want to see a restoration back to what we were promised.

as teachers.

The state is suing now to remove Rudi second bomb and Wade Steen from the board.

Those are members that your group supports.

Governor Mike DeWine has said there's evidence that there was serious discussion about taking $65 billion, about two thirds of the fund, and putting it in a very untested program with a company that had virtually no experience.

Attorney General Dave Yost said he's angry that four the five pension funds have been able to pay Colas, whereas SDS is not.

But he's concerned about that proposal, the idea that somehow, this I, this untested program will be used and that, Wade Steen and Rudy victim will personally benefit from this, and that's why he wants them removed from the board.

Do you feel the state is on your side in fighting for your best interests?

No.

they both have pledged their support for retirees.

We ought to be getting a cola.

Hey, they're at the top.

I mean, they can make that happen.

they clearly don't really believe what they're saying there.

we think that lawsuit is misguided.

that isn't what should be investigated.

what you probably should be investigated is Mike DeWine's removal of Wade Stein, his illegal removal of Wade Steen.

He appointed Wade Steen and then and.

Then illegally.

Removed last year when Steen then sued to get back on.

Yes.

Yeah.

And so the only person that's broke the law has been Mike DeWine.

Now, so when we when the reform group wins another election, they take a different tack to try to remove Wade and now Rudy as well.

we think that the investigation ought to be into stress, not into the people that are, elected by the STRs members.

we think it's a bullying tactic or, you know, whatever.

we're not going to lie down for it.

the interesting thing there, Karen, is that the removal of board members is, is directly contrary to what the legislative intent was.

They have seven elected members and only four political appointees.

to remove a person who is properly elected to the board is overturning the will of the people.

I saw where Mr. Yost said yesterday.

I believe that he supports the the retirees.

And yet 85% of the members have voted for the current slate of of members serving.

And, overturning the will of the people is not supporting them.

Is there a concern, perhaps, on his part or others, that you're backing candidates who are going to put you through changes into an untested program, and something that will actually make things worse for you?

Yeah, I, I would say the whole lawsuit about the, untested company and the, scheme of getting 65 billion.

Well, the minutes of the meeting show that the number wasn't 65 billion.

It was a proposal that never got fully proposed because it was interrupted.

It was sabotaged by the Stra staff and their consultants.

but but the end of it would have been a pilot test to see if this concept work.

Kind of a proof of concept.

It is working in Canada.

That doesn't mean it would work here, but it if it works in Canada, it certainly might work here.

Do you want to see this?

Tried here.

I wouldn't weigh an opinion on that because, that's not my deal.

I think all ideas, or to believes that all ideas ought to be fully vetted, but not by the people who stand to lose the most.

If you ask, the person standing on the gallows, what are the qualifications of a hangman?

he might take exception disqualifications and say, that's probably not a very good person to be doing this hanging, but but that, that process of vetting the pilot test, and it's in the minutes of the, of the meeting was 250 million.

That's is still a whopping sum of money.

It's half of what S.t.a.r.s lost and one crazy, stupid investment in 2015, when they lost 500 million with Panda Power.

So I think that number of 250 was intentionally put forward by the people say, well, you know this, we've lost this kind of money before, but, this would be a fair amount to pilot test the program.

Why do you think Yost and DeWine are looking at the fund now and raising concerns?

You folks have raised concerns for years, and I'll quote a line from the Toledo Blade, an editorial that said Mr. Steele and Mr.

Victim Baumer, under legal assault because the Ohio political establishment does not want that change and will be embarrassed by public awareness of the imprudent contracts covering billions of dollars.

Stress is approved.

Yeah.

we have a segment of our 94 billion into an asset class, and it's called alternatives.

Okay.

Alternatives are things that you and I wouldn't invest in their hedge fund market.

Investors.

Yeah, yeah.

Institutional investors.

I mean, they're not we're not allowed to just because we're small potatoes.

But, things like hedge funds, private equity, private capital, those things are mega, hundreds of millions of dollar investments and stress.

Board members are not allowed to know what the fees, cost and expenses are of those investments.

So roughly 18 billion, maybe upwards of $20 billion are invested.

And the only people that know what the fee structure are and what the, the expenses and costs of those investments are, are stress management and not the board.

So we question how they can do their fiduciary responsibility or duty.

If I even if they make 30%.

But if the fee is 29%, we only made one.

The demographics and stress are not great for long term sustainability.

Most of the people in the system are women who live longer than men.

There are more than 100 stress retirees who are over 100 years old.

The number of teachers contributing has been dropping because fewer teachers are entering the profession, and you have teachers going into charter schools and private schools, and they're not contributing.

That implies the the fund will run out of money if it's required to do what you want to see it do pay colas and also to continue to pay health care, which it does.

Oh, clearly they have to get more resources in there.

Has to be more money.

whether that is a population boom, which would take, what, a minimum of six, seven years for a start.

Yeah.

but that's not likely.

we think that if there are ways to make money, we need to investigate all of them.

But, more than that, or at least, connected to that is the increase in the employer contribution rate.

Our employer contribution rate.

When you consider the non social security states, we have the lowest in all of the non social security states at 14%.

It's been there for over four decades.

everything else in life has gone up.

not the contribution rate of employers.

And yet the employee contribution rate is the highest in the country.

Also 14.

Also 14%.

So our active teachers are are paying the highest rate and our employers are paying the lowest rate.

And so something seems out of whack with that.

Now stress to their credit.

and I don't often do credit for them.

I I'm guilty as charged.

They are seeking an employer increase.

Of course the people investigating this matter could rectify that.

They could assist in the heavy lift of getting the employer contribution rate increase.

There's actually a law on the books.

33 07.

14 E that says it's already in law, that they can increase the employer contribution rate.

They won't do.

They won't even follow their own law to balance their teacher pension program.

SARS has paid around $10 million in bonuses in 2022, and in 2023, the budget the board approved raise salaries by an average of 17%.

Some salary increases as high as 45%, but stress is.

Actuary said in March that restoring the Cola permanently would add about $21 billion in liabilities, so cutting bonuses and stopping salary increases, they're not going to know not going to bring back the Cola.

They could triple the triple the bonus and it wouldn't, you know, get a cola or.

You've been focusing on bonuses and salary increases.

That's not what's going to solve the problem.

No, no, solving the problem is in our mind is moving away from active investing, which is trying to beat the market, which they never do.

you know, and the definition of insanity, we know that.

But, if if they went to an index, according to the auditor of state, said that had they used the same asset allocations, but in indexed it at a much, much lower cost indexes are way lower than even inside active management.

We would be 12 billion ahead of where we're at.

so we have thrown out as a solution.

Let's move to index investing, eliminate all the cost, will live and die with the market.

We could tie cola to the, what happens in the market.

I mean, Goodyear, hey, we're going to get a cola.

Bad year.

Oh, we don't get a cola.

Well, and I think there is something in the US and said that, it can't invest in an index because, That's what they.

Say.

We have to diversify.

What's the most broad, most diverse of all, the S&P 500 and or the Russell 3000, 3000.

So then that's a straw man.

They're not being truthful when they say they can't switch over to, because they're the same things.

They're just bought at a much lower cost.

And you're buying an index as opposed to buying, you know, individual picks, trying to pick a winner and get rid of a losers.

There are pitfalls in investing in index.

Sure, too.

But rather than discussing that, because there are two different sides of that and very strong opinions on that, let me ask you, do you have the support of teachers unions, the, Ohio Education Association, which in full disclosure, is an underwriter of this program and the Ohio Federation of Teachers, are they on board with what you want to see done?

The Ohio Federation of Teachers have been supportive of the reform movement.

they have they supported the Edward Seidel, investigation.

they, OCA has not only a it has we've met with them and they are fully committed to status quo.

Everything is fine.

We just have to stay the course.

and, you know, the if you look at the projects.

yeah, the the plan will reach full funding.

I don't know if they said 17 years.

That number moves when we have a good year.

or not.

But what I worry about is 3000 or more retirees will die this year.

They don't have time for this thing to, quote, get corrected in 10 or 12 years.

You know, in 10 or 12 years, I'll be pushing 80.

And, you know, I don't know that seems like a long time to wait to get what you were promised 40, 50 years ago.

And finally, are you concerned that you might be taking advantage of because you're angry and you want change?

I mean, the idea behind QED, which is this private investment company, has been explained to me as being untested, which is what the governor said.

I agree.

Yeah.

And are you concerned, though, that you might be vulnerable here to people who want to see investment for their own personal benefit?

Everybody wants our money.

Don't don't get me wrong, everybody wants 94 billion.

Who?

You know, who wouldn't?

yes.

Every night I have to think, oh my God, what if I'm wrong?

What if they're right and I'm wrong?

and so I do a lot of reflection and try to try to make sure that the that what I know the facts to be, are supportive of my conclusions.

but as I'm not an investment expert, people, you probably could get Warren Buffett in here and he would tell you and, index invest, I guarantee you, because I've read a lot about what he says, you would have other people say, no, that's not the right way to go.

we know that reducing cost, which is significant in our, called net return, is is, the cost is the key component because everybody about gets the same return.

It's just how much did it cost you to get that return?

And do you think teachers can ever get your trust back?

Because it sounds like you don't trust what SDS is telling you.

Well, we'll see.

As the reform, board takes over and as they set agendas and, policies will we'll know in time again, something that old people have very little left of.

Investigator Ted Snell blasted says for a lack of transparency, high fees and poor performance in his 2021 report on the fund, SDS shot back.

The report contained misstatements and baseless allegations that the fund has beat established benchmarks.

That is it for this week for my colleagues at the Statehouse News Bureau of Ohio Public Radio and Television.

Thanks for watching.

Please check out our website at State news.org or find us online by searching State of Ohio Show.

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There is no podcast in observance of the Memorial Day holiday, but feel free to catch up with our previous episodes, and please join us again next time for the State of Ohio.

We end this week with images from the annual Memorial Day wreath laying ceremony at the statehouse.

But coming up, as always in the land home or when the valley's rushing, like with snow and I'll be there in sunshine or in shock.

To.

Support for the Statehouse News Bureau comes from a medical mutual dedicated to the health and well-being of Ohioans, offering health insurance plans, as well as dental, vision, and wellness programs to help people achieve their goals and remain healthy.

More at Med mutual.com.

The law offices of Porter, Wright, Morris and Arthur LLP, Porter Wright is dedicated to bringing inspired legal outcomes to the Ohio business community.

More at Porter.

Right.

Com Porter Wright inspired Every Day and Ohio Education Association, representing 120,000 educators who are united in their mission to create the excellent public schools.

Every child deserves more at OHEA.org.