Pensions

How pension reform shrinks R.I. deficit

Rhode Island Governor-elect Gina Raimondo rose to political prominence engineering a difficult pension reform in the Ocean State back in 2011. Now one of her challenges as governor will be grappling with a state budget deficit that, by her calculation, will be much larger if the courts overturn those reforms after a long legal battle…

Poll: The high-tax, gov’t union model at work

leaving njA new poll finds that half of all New Jersey residents say they plan to leave the state, compared to just 45 percent who want to stay. The desire to leave is particularly strong among working age people, reflecting the state’s more than 10 years of economic struggles. Some three-in-ten who say they want to leave specifically blame the state’s high taxes for their desire to leave…

Colorado court: Things go better without COLA

Something that initially escaped my attention. The Colorado Supreme Court recently restored a measure of fiscal sanity to public sector retirement law in the Centennial State by reversing a Court of Appeals ruling which said that the state could not cut cost-of-living adjustments to help …

Stockton bankruptcy Part Two not great, but not terrible

After federal bankruptcy Judge Christopher Klein gave his verbal ruling early this month in the Stockton bankruptcy case, it was the first time in ages that California’s pension reformers had something to celebrate. Klein ruled that pensions can be impaired in a bankruptcy, defying the …

California: Premium pay for ordinary duties

The LA Times has a follow-up story on the August vote by the Calpers board to approve 99 categories of additional pay that government employees in the Golden State can use to boost the amount of their salary that counts toward their final pension. While the major import of the story is the way Calpers undermined modest pension reforms signed into law in 2012, it’s fascinating to see just what kinds of tasks earn government workers “premium” pay…

Warren Buffett: Call your city council

Warren Buffett might be considered one of the world’s savviest investors, but his warnings aren’t being heeded in his own hometown. Buffett has called the public pension nightmare a “gigantic financial tapeworm” eating away at city and state finances, and he’s criticized funds for their optimistic investment assumptions. His own Berkshire Hathaway uses a modest 6 percent annual projected return on investments in its own pension funds…

Philly: More dubious budget reporting from NYTimes

The NY Times finally decided to jump in with its take on the controversial story of Philadelphia’s school reform commission cancelling the teachers’ contract. Not surprisingly, in a story largely sympathetic to teachers (pointing out, for instance, that they make less in salary than neighboring suburban teacher) the Times ignores most of the relevant fiscal facts…

Health care + pensions equal insolvent NJ

New Jersey has gotten a lot of publicity lately because Chris Christie has balked at meeting the state’s extraordinary pension burden, arguing that further reform of the system is necessary. But as a recent NJ report makes clear, Jersey really has a problem of expensive health care for workers and retirees on top of bulging pension debts, which have raised the cost of employee benefits in NJ well above the norm for states. The reason Jersey isn’t paying all of its benefit costs is because it couldn’t possibly afford to…

Watch door to bankruptcy slam shut to protect pensions

In the wake of Judge Klein’s ruling last week that Stockton could cut pension debt in bankruptcy, fiscal reformers and conservative commentators where quick to assume, somewhat naively, that this ruling changed everything and would force recalcitrant unions to the negotiating table. The truth, however, is that many states put up numerous roadblocks to municipal bankruptcy and the real import of the ruling was that states where public unions dominate were likely to throw up even more blocks. Now we’ve seen the first indication of this…

Bad pension ideas migrate to desperate NJ

hevesi6n-2-webFor two decades NJ has been a repository of some of the worst government pension practices in nation. Now in a desperate attempt to find answers to its huge pension problems, policy makers seem willing to consider bad ideas from elsewhere, perhaps reflecting how little the state understands about how it got into its mess in the first place. The latest notion is that neighboring NY managed to avoid similar problems thanks to its comptroller’s office, which somehow kept the state out of pension trouble. Ha!