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Slow growth, high debt states worry Washington GOP

By Steve Malanga on May 17, 2012 3:24 PM | No Comments | No TrackBacks

The staff of the Republican Joint Economic Committee of Congress digs into the fiscal and economic performance of states in a new report that raises concerns about the diverging paths of states, with some states enacting significant reforms to deal with their debt and pension problems and others continuing to pile up liabilities. Provocatively titled Eurozone USA?, the report compares the economic performance of states with low debt, smaller levels of unfunded retirement liabilities and modest taxes to states that have higher debt and taxes.

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Green Bay seeks to save money by privatizing crossing guard jobs

By Christian Schneider on May 16, 2012 5:24 PM | No Comments | No TrackBacks

Per the Green Bay Press-Gazette today:

The City of Green Bay is now looking to hire a private security firm to provide school crossing guards; currently, crossing guards are employed by the city, represented by the Teamsters Union, and are paid around $12 per hour. The guards fear that privatizing the service would drop their pay and benefits, although there's no evidence cited in the story that would back up their claim.

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The political problem of the "Wimpy" state

By Daniel DiSalvo on May 16, 2012 11:34 AM | No Comments | No TrackBacks

Remember Wimpy? His famous line was: "I'll pay you tomorrow for a hamburger today." That is, in effect, the practice of states jpg

and local governments who have been offering citizens more public services (schools, roads, police protection, etc.) today and promising to pay for them tomorrow. What happens when the bill comes due is a huge political problem...

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Risky business: Pension valuations

By Steve Malanga on May 16, 2012 10:27 AM | No Comments | No TrackBacks

More and more people are coming to understand that the huge pension mess confronting more and more state and local governments is at least in part a result of unrealistically high estimates of investment returns, often projected at 8 percent annually by public pension funds, which have missed their investment goals consistently over the last decade. Theoretically, the higher the return from investments the less that taxpayers have to chip in to finance pensions, and the lower the returns, the bigger the bill for taxpayers. Just how much of a difference investment returns make are illustrated in a new study by the Center for Retirement Research at Boston College.

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New Jersey or California: a fork in the road for government reform

By Troy Senik on May 15, 2012 4:33 PM | No TrackBacks

Here in California, it used to be commonplace for disaffected voters to long for a figure like Rudy Giuliani, who could sweep into office and restore the tarnished luster of the Golden State. In fact, that's what many Californians thought they were getting with the election of Arnold Schwarzenegger to the governorship in 2003. That experiment, however, failed to produce anything like the results of Giuliani's, particularly after the Governator fell captive to faddish third way statism in his later years in office. These days, the unsatisfied Californian is more likely to point to New Jersey Governor Chris Christie as an example of the kind of leadership he wishes he had. In today's Wall Street Journal, Bill McGurn makes a compelling case as to why that is.

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In San Francisco, struggling schools hit hardest by seniority-based layoffs

By Troy Senik on May 14, 2012 1:15 PM | No TrackBacks

The decline of California's public education system -- once one of the country's finest, now near the bottom in most national rankings -- owes to a wide variety of wayward public policy choices. One that has a particularly deleterious effect on some of the Golden State's worst schools is the practice of laying off teachers by seniority, so that the most junior instructors are the first to be relieved of their employment, regardless of classroom performance. This is particularly noxious for underperforming urban campuses, where young, energetic teachers (often with special training) tend to be the only instructors capable of turning around flagging institutions. Now, in San Francisco, precisely that kind of progress is being snuffed out through union opposition.

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In corrupt California city, public workers being paid six times for the same work

By Troy Senik on May 11, 2012 5:13 PM | No TrackBacks

Two years ago, the Los Angeles Times made waves with an investigate report that revealed that the tiny Los Angeles County city of Vernon was a hotbed of public sector venality and corruption. The apotheosis of this trend was former City Administrator Bruce Malkenhorst, who pulled down an annual pension of over $540,000 -- the highest in the state -- for having governed a city of 95 people. Last week, CalPERS (California's largest pension fund for public employees) released the results of an audit of Vernon, and the results were appalling.

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Question for next mayor: Bloomberg or Faulkner?

By Nicole Gelinas on May 11, 2012 3:44 PM | No Comments | No TrackBacks

New York will (one presumes) have a new mayor come January 2014. One question for that mayor will be whether he or she chooses the past or the present.

The (future) present: the new mayor likely will face a deficit of $3.7 billion for his or her inaugural budget (fiscal year 2015). That's a good seven percent of city tax revenues.

The past: unless Mayor Bloomberg and municipal unions do some serious negotiating in the next few months, the new mayor will face more than a dozen expired contracts -- and union leaders requesting retroactive settlements.

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Shining a light on release time

By Daniel DiSalvo on May 11, 2012 12:03 PM | No Comments | No TrackBacks

A new report by New Jersey's State Commission of Investigation exposes a common practice of "official" or "release" time and has rightly made headlines. See here, here, here, here, and here. The practice entails paying public employees to work for their union. Over a five year period, the report found, the Garden State paid more than $30 million for public workers to conduct union business.

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Conflict among unions on infrastructure investments

By Zachary Janowski on May 10, 2012 9:02 PM | No Comments | No TrackBacks

My second article from the National Conference on Public Employee Retirement Systems convention highlights a difference of opinion between private- and public-sector unions. The building trades support private infrastructure investments, but public-sector pension officials were skeptical.

WWTBD: What Would Tom Barrett Do?

By Christian Schneider on May 10, 2012 3:19 PM | No Comments | No TrackBacks

On Tuesday night, Milwaukee Mayor Tom Barrett won a landslide victory against his union-backed opponent, former Dane County Executive Kathleen Falk, for the right to face Wisconsin Governor Scott Walker in the June 5 recall election. But while the night was supposed to be Barrett's alone, Walker became a primary storyline. Walker actually received more votes than Barrett and Falk combined, despite running virtually unopposed.

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Government pension convention starts with a combative tone

By Zachary Janowski on May 10, 2012 2:22 PM | No Comments | No TrackBacks

I covered the annual convention of the National Conference on Public Employee Retirement Systems on Monday. The conference, wrapping up today, opened with fighting words from NCPERS President Pat McElligott and New York City Comptroller John Liu.

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Tackling the pension "transition" issue

By E.J. McMahon on May 9, 2012 1:00 PM | 7 Comments | No TrackBacks

Proposals for fundamental reform of public pension systems around the country frequently have run into one version or another of the same technical objection: closing the traditional system will somehow impose a steep "transition cost" on taxpayers. For example, the National Institute on Retirement Security, which is supported by public pension boards and the financial firms that work with them, issued a widely cited research report asserting that a move from defined-benefit (DB) to defined-contribution (DC) retirement plans would "increase costs to the employer/taxpayer at exactly the wrong time."

The transition cost shibboleth is effectively demolished in a paper issued today by the Laura and John Arnold Foundation.

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What small businesses think about their states

By Daniel DiSalvo on May 8, 2012 12:15 PM | No Comments | No TrackBacks

Thumbtack.com surveyed 6,022 small businesses (here is the methodolgy of the survey) for their views of the business friendliness of the states and cities in which they operate.The result is an interesting set of rankings and ratings.

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Legislators do little to reform their pensions

By Steve Malanga on May 8, 2012 10:43 AM | No Comments | No TrackBacks

Revelations that former Chicago Mayor Richard Daley used loopholes in Illinois pension rules for legislators to juice

up his own final pension has led to calls for reform of the retirement benefits that state and local lawmakers give to themselves. Perhaps Daley's visibility as a prominent politician will focus more attention on this area not just in Illinois, but elsewhere. Unfortunately, there's plenty of reform necessary from California, Texas and Arizona to New York and New Jersey. But so far few places have done anything significant to rein in lush benefits for legislators, despite an estimate by USA Today last year that 33 states have special retirement laws granting benefits to lawmakers that other government workers don't enjoy.

South Carolina offers the latest lesson in how resistant legislators are to true reform...

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