January 2012 Archives

The president sees a starving public sector unable to adequately meet the needs of the public, a world where heroic teachers must dig deeply into their own pockets to pay for school supplies. But public schools are short on cash not because of a lack of taxpayer support, but because of misdirected priorities driven by a lack of competition, bureaucratic inertia and union demands.

Undue optimism will not pay for California's public pension costs. The state instead needs retirement benefits that are sustainable long-term, and not an increasing drag on public budgets. Pension officials should base financial planning on cautious projections, and not rosy assumptions.

Some of California's rank-and-file firefighters earn so much money in overtime that the state has revived pay bonuses worth thousands of dollars to lure them into management.

Since 1971, the LA Unified School district has been violating California state law by excluding student achievement from the evaluation of its teachers. Why? Because the teachers union wouldn't allow it. In a hard-hitting expose in City Journal, Larry Sand, a retired teacher and president of the California Teachers Empowerment Network, sheds light on this shocking development, demonstrating once again how Public Sector Inc. is hard at work protecting its own interests at the expense of America's taxpayers, and in this instance, their children.

"Without sufficient staffing," [a report by State Auditor Elaine Howle] said, "the [California High-Speed Rail] Authority has struggled to oversee its contractors and subcontractors, who outnumber its employees by about 25 to one."

Howle also said the rail authority violated a state rule prohibiting agencies from splitting contracts to avoid competitive bidding requirements, dividing $3.1 million in information technology services into 13 different contracts with one vendor over 15 months.

There is one silver lining to this news about naked cronyism: we know now there's at least one thing the High-Speed Rail Authority can do efficiently.

Yesterday on FOX Business Network's "Varney & Co.", Steven Malanga discussed Illinois's persistent deficit -- a year after raising taxes. How can lawmakers fix this mess? Well for one thing, the Prarie State hasn't changed their pension system and it is now one of the worst funded in the country. Watch what Steve has to say about the Prarie State pension mess.

The defined benefit pensions that our tax dollars fund for public sector workers are unsustainable. Recently, a handful of courageous politicians - such as the Manhattan Institute's 2011 Urban Innovator Award recipient, Rhode Island General Treasurer Gina Raimondo - have tackled this issue head-on, and for the long-term, by shifting away some risk from the taxpayer and linking future benefit increases to the health of the state's pension fund. However, far more often, politicians simply put a band-aide on the problem and hope that the economy will recover so that the problem appears to go away. What will not go away is the reality of math. The financial assumptions that underpin our current public pension systems are flawed. So today, in an effort to better educate the American taxpayer and illustrate in unbiased terms the difference between public sector pensions and private sector retirement savings, we are unveiling CalculateYourPublicPension.com.

Pension funds around the country face massive underfunding problems. But some, especially the pension funds’ administrators, argue that the problem will fix itself with market rebounds. But this scenario is unlikely to happen without fundamental pension reform.

Today's New York Daily News reports Governor Cuomo will propose a defined-contribution option as part of a pension plan to be unveiled as part of the 2012-13 state budget the governor will unveil later today. Specifically, says the News, "all new state and city workers, including police and firefighters, would have to choose between enrolling in a 401(K) plan or getting pension benefits that are less generous than those currently offered, sources say."

[City Manager John] Shirey told the City Council on Tuesday night that half the city's budget deficit over the next two years could be eliminated if all city workers paid the employee share of their CalPERS retirement contributions.

Steven Malanga says that there are ways for every state to be able to fix their pensions pains on FOX Business Network's "Varney & Co." this morning. Watch and learn (also, read his latest PSI blog post on Hatch's plan).

Imagine working for a company. Now imagine getting a guaranteed pay raise every year, no matter how you perform or how the company performs. Now imagine your annual review, that meeting where your boss evaluates your performance and considers increasing (or decreasing) your compensation. But instead of prepping for this important meeting, you simply decide to stay home, knowing fully well that as a result of your decision to skip the meeting, your boss has been left with no choice but to give you an annual raise. Why: because his hands are tied. As a report issued today by the Empire Center for New York State Policy makes clear, that is exactly how things unfold year after year for thousands of New York State public workers.

Too often politicians claim that entrenched interests make it impossible to reform broken systems. Specifically, Democrats cite the threat of retaliation by powerful public employee unions as the reason why they simply cannot challenge the status quo. But as hundreds of us learned first-hand yesterday afternoon at the Manhattan Institute's 2011 Urban Innovator Award Ceremony - in one of the darkest of blue states in the nation, Rhode Island - an intrepid leader named Gina Raimondo has cast politics aside and gotten results. As reported in today's Wall Street Journal, the first-term treasurer put math before politics, outlining the gravity of the Ocean State's pension crisis in simple terms that everyone could understand.