Home  :  AFT NM Petitions HB 854 Repeal

HB 854 cuts $84 million from employee pay, may create $420 million loss for economy.

AFT New Mexico's political action committee (COPE) has started a statewide petition drive to repeal House Bill 854. The committee is circulating petitions among school employees, their families, friends and supporters by direct mail, email and websites. The committee is holding meetings and town halls to explain the petition and get signatures.
 

"We must repeal 854. It hurts employees, and hurts the economy. 854 is anti-stimulus," said AFT New Mexico COPE Vice President Tim Crone. Crone is a tenured professor of Social Sciences at Northern New Mexico College in Espanola.
 
"In two years, 854 will cut $84 million from our paychecks. Many employees are living paycheck-to-paycheck. We need this money to pay mortgages, buy food, cover health insurance and utility costs," said Crone.
 
"Our economy is in the worst condition since the Great Depression. If employees have $84 million to spend, it will help stimulate the economy. This will help businesses in our cities, towns and villages stay in business. But, when 854 takes that $84 million out of our paychecks, it may create a $420 million loss

to the economy due to the multiplier effect," said Crone.
 
"Passing 854 is the worst thing lawmakers could do in this recession. We must repeal 854. We call on school employees, their families, friends and supporters to sign this petition," Crone concluded.
 
BACKGROUND
Economists have stated that as consumers spend their paychecks, the money turns over at least five (5) times in the economy, and creates more value. Economists call this the "multiplier effect." Economists also say consumer spending now drives 72 percent of America's economy.
 

$84 million X multiplier effect of 5 = $420 million: the amount New Mexico's economy could lose as a result of HB 854.
 
Legislators and the governor approved 1.5 percent cut in the amount school districts pay for their employees' retirement. Lawmakers then appoved HB 854 which increases retirement deductions by 1.5 percent for employees earning $20K or more. HB 854 was sponsored by Rep. Kiki Saavedra (D-Bernalillo Co. - Dist 10).
 
The Educational Retirement Board (ERB) will invest the additional $84 milllion gained by HB 854 in Wall Street funds. ERB's Wall Street funds have suffered multi-million dollar losses due to risky investments. Individuals who recommended these risky investments to the ERB are being investigated by the FBI.
 

Increased employee paycheck retirement deductions due to HB 854:
$20K X 1.5% = $300                 $60K X 1.5% = $900                
$30K X 1.5% = $450                 $70K X 1.5% = $1,050
$40K X 1.5% = $600                 $80K X 1.5% = $1,200
$50K X 1.5% = $750