Posts Tagged ‘pension reform’

How NOT to do pension reform

July 25, 2012

Riverside County, California recently finalized changes to their public pensions, hoping to put them on sound financial footing. Looking at $4.7 billion in obligations, and annual pension expenditures that would consume half of the total county budget by 2020, county supervisors felt it necessary to act.

The recent reforms will reduce pension costs by $360 million through mid-2016. In exchange for pension changes, county supervisors struck a deal with union reps – to increase salaries and benefits by $731 million – and that does not count an additional $40 million in new CalPERS expenses in just the next four years.

According to a recent county Human Resources analysis, “The county saved $2.5 million in the fiscal year that ended June 30. And the county faces a modest net cost of $5.1 million in the current year. But the county will have to absorb cost increases of $59.7 million in 2013-14, $119.6 million in 2014-15 and $188.3 million in 2015-16.”

Those increases come largely from raises and cost-of-living increases and are new expenses for a county that has lost almost $300 million in tax revenue since 2007. In fact, the county laid off 229 employees this year alone to balance the budget and still faces more potential job cuts in the months ahead.

Pension costs have reached a crisis point all over this country and elected officials everywhere are faced with addressing them. Unfortunately, Riverside County chose a short-term Band-Aid approach, trading small cuts now for large increases later. They kicked the can down the road a mere 4 years – with no ability to pay the increasing costs except for perhaps a good dose of wishful thinking.

Retire, collect $500,000 in pension, go back to work

January 2, 2012

Taxpayers in Philadelphia are stuck with hefty bills because of sky-high pension benefits for people who retire for a weekend, then come right back to work.  City Councilwoman Marian Tasco retired Friday, collected almost a half a million dollars in pension benefits and returns to work today, when she will be sworn in to serve a seventh term.  She will be joined by  Ronald Donatucci, who will collect $366,797 when he returns to work after a week-long retirement and they both join colleagues who have previously done the same thing.

The city offers a “Deferred Retirement Option Plan” that allows workers to collect a salary AND build up pension money during the last four years of their employment. Touted as revenue-neutral when it originally passed, Philly’s DROP program has cost the city a quarter of a billion dollars in just 10 years. Mayor Nutter has vowed to “work tirelessly” to abolish the program but right now, just shy of 400 people have signed up for it, declaring they are within their last 4 years of work.

This fall, the Philadelphia city council voted to override the mayor’s veto of a bill that preserves the program – a bill sponsored by none other than Marian Tasco. The city council has also raised taxes two years in a row and now the best solution they appear to have come up with is simply stall for time while more and more people move through the system, collect 6-figure payouts and go right back to work.

Citizens are starting to catch on. Four retiring council members are DROP participants while one incumbent lost his re-election bid in part because of his participation in this giant albatross of a program.   What were they thinking?!

New Hampshire gears up for pension reform

December 1, 2011

Facing a $4 billion unfunded liability in its retirement system, New Hampshire is getting ready to introduce pension reform measures in the 2012 session.  As they gear up, the Speaker of the NH House, William O’Brien, invited “National pension reform leader” Dan Liljenquist to address a special committee.

The New Hampshire “Union Leader”, well-known for their political punditry, covered Senator Liljenquist’s presentation.  They write:

The 2008 stock market crash was a disaster for the once fully funded Utah state retirement system, but it set the stage to change the system from a defined benefit to a defined contribution system.

The main architect of the change, Utah state Sen. Dan Liljenquist, briefed the New Hampshire House Special Committee on Public Employee Pensions Reform Tuesday. He talked about changes made to Utah’s system as New Hampshire lawmakers decide if reforms enacted this year and several years ago will be enough to put its system on solid ground.

A special legislative committee released a report last month recommending two retirement systems, one for current workers, and one for those hired after the new plan goes into effect.

Some lawmakers want to pass a law this spring switching all new public workers into a 401(k) plan meant for public employees.

The plan would be a defined contribution plan, where the level of money going into the plan is pre-determined. A defined benefit plan delivers a set of promised benefits in retirement no matter how the financial winds change over time.

The New Hampshire Retirement System is a defined benefit plan.

Senator Liljenquist was also interviewed by a local blogger.

As Senator Liljenquist is fond of saying, these are not partisan issues – these are reality issues. And “reality is not negotiable.” That is why Rhode Island – a Democrat-dominated state – has joined Utah and other states in reforming their pension programs. RI Treasurer, Gina Raimondo, was the architect behind that state’s reforms and spent months consulting with Senator Liljenquist on Utah’s model. Both Raimondo and Liljenquist spoke this week to the Harvard Kennedy School of Government on their reforms. Pension reform will be a top priority for multiple states in the 2012 legislative session.

Utah’s rising star, Dan Liljenquist

November 21, 2011

State Senator Dan Liljenquist recently returned from Washington DC where he received back-to-back awards for his courage and innovation tackling the complex problems of exploding pension and Medicaid costs.

Governing Magazine called Senator Liljenquist the “Change Agent” for his reforms. Each year, Governing chooses only one state legislator, out of over 7000 nationwide, one Governor and a handful of others involved in government at the local level. This year, they also honored the Governor of Arkansas, Mayor of Atlanta, a county executive, a police chief, a judge, a couple of very cool techie innovators working with the city of Boston and the Chancellor from CUNY, the City University of New York. Governing, a non-partisan group, does not appear to care which political party their honorees belong to and in fact, they gave more awards to Democrats than to Republicans. There was one consistent theme however – fiscal reforms. The presenters repeatedly mentioned we were “standing on a burning platform” financially and it was way past time to start addressing the real problems. The award winners were, for the most part, public officials willing to step up and tackle thorny problems head-on.

In addition to the award from Governing, Senator Liljenquist was named the “Legislative Entrepreneur of the Year” by FreedomWorks. The award – given out only a handful of times – has been given to people like now-Senator Marco Rubio, Indiana Governor Mitch Daniels and then Georgia House Rep Tom Graves, now in Congress. “Legislative entrepreneurs are tenacious political leaders who challenge the status quo and take bold action to advance liberty and limited government. We can thank Senator Liljenquist for the ground-breaking pension and entitlement reforms in Utah that are now the envy of states across the country, and serve as a model for the nation,” read the press release. “The fact of the matter is, while states like New York, Illinois and California are headed for bankruptcy, the financial future of Utah is secure because of Liljenquist’s reforms.”

FreedomWorks praised Liljenquist’s legislative innovation as he introduced free market principles into the “most difficult spending issues in government.” Senator Liljenquist, widely rumored to be challenging Orrin Hatch, caught the eye of a number of national media peeps as well. Check out some of the press he picked up this weekend: Daily Caller, CNNNational Journal, Red State’s Erick Erickson, Politico, the Rising Republican and all over the AP wire.

He felt the love here too. Daily Herald, SL Trib, DNews, Fox 13 and the Standard Examiner all carried stories about his awards and his potential run for the US Senate.  Stay tuned – things are getting interesting!

RedState interviews Dan Liljenquist

November 7, 2011

Pension reform, Medicaid reform and …….. a little bit more.

Daily Fix, Aug 2

August 2, 2011

*Last week, Representative Julie Fisher resigned to become the state director of the Department of Community and Culture. There will be a special election to fill the vacancy on August 25th. To date, there are 6 people in the race but the deadline to file is August 18th. Currently running are Carl Downing, Peter Cannon, Stewart Barlow, Don Milligan, Benton Bramwell and Neil Harris. D News

*President Obama nominated David Barlow, a Republican, to be the US attorney for Utah. He has been serving as Senator Mike Lee’s general counsel since January. Fox 13 Barlow’s appointment was met with howls from the Dems in Utah, wanting to know what back room deals were made. None, say the powers that be. Trib

*Mayor Mia Love just returned from a trip to Washington DC, where she met with a variety of people and organizations, including the NRCC, where she was very well received. She will not make a final determination until after redistricting is done. Trib

*Orrin Hatch snagged an endorsement from Sean Hannity today. Hannity said praised Hatch for fighting for Balanced Budgets and for his work in appointing conservatives to the Supreme Court. Washington Examiner

*Hatch is also taking heat for censuring unfavorable comments on his Facebook page. According to the SL Trib, Jen Howe joined that conversation to ask what he would “cut, cap and/or balance” in the federal budget. “Hatch responded that he would reveal specifics after the proposed balanced budget amendment passed. So Howe asked how he could ask his fellow co-workers to vote on something they didn’t know the specifics of, and told him she felt his constituents also needed access to this information. “For this, he defriended and removed me from his page, along with many others,” Howe says.” Hatch’s spokesman says they only remove “inappropriate, obscene or other offensive remarks on his page.” Trib

*Senator Mike Lee unveiled his new PAC – the Constitutional Conservatives Fund. His goal will be to “find and support candidates for federal office who share my view that federal government has become too big and too expensive.” He is open to supporting challengers to sitting Senators. The Hill

*Moody’s did NOT downgrade the US’ credit rating but did give it a negative outlook. I guess the world didn’t end after all. The Hill

*Central Falls, Rhode Island is broke. 18,000 people live there and are facing $80 million in unfunded liabilities to pay for the pensions of 141 people. Senator Dan Liljenquist blogs that “reality is not negotiable.”

*A Pleasant Grove man had a bad night when he crawled in bed with the wrong woman. In the wrong house. And started to get romantic. You gotta feel for him… Trib

*And finally, The Mayor of Vilnius, capital of Lithuania, has had enough. He’s sick of people parking where ever they feel like it and he decided to prove his point. Check it out.

Daily Fix, June 23

June 23, 2011

*The GRAMA working group held their final meeting and has government recommendations ready to present to the governor. In my opinion, we agreed on far more than we disagreed on. Now we’ll see what happens during the next session. Trib, Fox 13, KSL

*The Hatch make-over into Tea Party candidate continues to garner national attention, as does the effort to stack the March 2012 caucuses. Former Utah GOP chair Dave Hansen said “We have a field staff of 15 to 20 people that are working very hard with existing delegate lists, past delegate lists, party caucus attendees from the past and also recruiting from various organizations and business interests. We’re not trying to necessarily convert people. If they’re for us, great. If they’re not, we’re going to replace them.” I’m guessing there are some delegates already working to make sure they are NOT replaced. Roll Call

*Bob Bernick had a great post on UtahPolicy.com about Saturday’s convention and the cracks in party unity. Check it out.

*In San Francisco, the average retired city employee’s pension is now greater than the average San Fran worker’s wage. So far, efforts at pension reform have flamed out but a new push is underway to look at capping pensions and preventing spiking. SF Gate

*Meanwhile, New Jersey saw over 8000 protestors complaining about pension reforms. Union leaders claim is a “war for survival” but refuse to face the cold hard facts. This year alone, the gap between promised benefits and actual funds grew by $8 billion (almost the entire budget for the state of Utah.) The total unfunded liability? Over $120 billion. Kudos to Christie and the NJ legislature for doing what needed to be done. DNews, NJ Statehouse

*If you’re counting on Social Security, don’t. That world – and the money – is gone, says Thomas Sowell. In fact, he says the way “Social Security was set up was so financially shaky that anyone who set up a similar retirement scheme in the private sector could be sent to federal prison for fraud.” DNews

*Speaking of money and the lack thereof, Eric Cantor walked out of talks on the nation’s debt when Biden, on behalf of the Democrats, demanded that taxes be raised. In a statement released by his office, Cantor said “the Democrats continue to insist that any deal must include tax increases. There is not support in the House for a tax increase, and I don’t believe now is the time to raise taxes in light of our current economic situation.” The Hill

*Al Gore suggests population control as a way to combat global warming and decrease our carbon footprint. Eyeroll. KSL

*And finally, Jimmer is King – a Sacramento King, that is. KSL

Meet Adolf Christie

June 16, 2011

Governor Chris Christie knows the money is gone, the state is bankrupt (even if some people refuse to admit it) and that major reforms need to happen. So, when he works on pension reform with the Democrats in the NJ legislature, this is the response…..

Nice.

Wisconsin’s runaway Senators

February 17, 2011

Democrat Wisconsin Senators took off today instead of voting on a bill that would enact pension reforms and place some controls on collective bargaining for unions in their state. With them gone, the Senate lost their quorum and can not proceed the vote.

About 10,000 teachers, nurses, city workers and firefighters gathered at the Capitol to protest the bill today. In fact, 40% of the state’s teachers refused to show up to work yesterday or today and many took their students with them as they protested against reform.

The state’s 170,000 public employees were promised no furloughs or layoffs in exchange for bearing more costs and a change in those collective bargaining agreements. Under the governor’s proposal, public-worker unions could still represent employees, but could not pursue pay increases above those tied to the Consumer Price Index unless approved by a public referendum. Unions also could not force employees to pay dues and would have to hold votes once a year to stay organized. If the measure fails, Mr. Walker expects layoffs of 6000 public employees.

According to a local radio station, the “proposal marks a dramatic shift for the state, which passed a comprehensive collective bargaining law in 1959 and was the birthplace of the national union representing all non-federal public employees. In addition to eliminating collective bargaining rights, the legislation also would make public workers pay half the costs of their pensions and at least 12.6 percent of their health care coverage — increases Walker calls “modest” compared with those in the private sector.”

In spite of the long history of being a union state, voters in November elected Governor Walker, an outspoken conservative, and GOP majorities in both the House and Senate, a clear sign that the public was ready for a change.

“We’re at a point of crisis,” Mr. Walker told reporters. And while he said he appreciated the concerns of the public employees shouting outside his office door, taxpayers “need to be heard as well.” Mr. Walker said the dramatic action is necessary to close the state’s gaping budget hole for the fiscal year starting in July and avoid massive employee layoffs.

The runaways were found holed up in a Best Western in Illinois, presumably out of reach of the Wisconsin Highway Patrol. They have supposedly called CNN with a “list of demands.” Governor Walker calls today’s actions “more theatrics than anything.”

Daily Fix, Jan 19

January 19, 2011

Utah gets props from the Wall Street Journal and an F from NARAL. Legislative audits highlight problems with state-run parks and DCFS and one more US Senator is expected to announce his resignation.

*Senator Dan Liljenquist led the fight on pension reform and now Utah’s reforms are becoming the model legislation for states around the nation. WSJ

*State lawmakers continue to travel around the country – but they’re doing it on their own dime. From higher ed to pension reform to work with ALEC and NCSL, a number of state Senators are continuing work that benefits the state and aren’t charging the taxpayer. Kudos to them. Paul Rolly

*Utah gets an F – and it’s a good thing. NARAL Pro-Choice America released its annual report on Friday. Utah gets a big fat F, which means it ranks at the top of pro-life states. Good for us. CNS News

*Ouch. A legislative audit released yesterday shows that only 9 of 43 parks and only one of four golf courses bring in enough money to be self-sustaining. The audit recommends that four parks and one golf course be closed: Green River Golf Course, the Edge of the Cedars, the Territorial Statehouse, Frontier Homestead and Utah Field House Museum. Deseret News

*Another audit found that the David C vs Leavitt lawsuit of 1993 has made “DCFS (the Division of Child and Family Services) and court staff risk averse and led them to protect children in foster care more than in-home.” Foster care placements have increased 38% in the last decade while in home support of children and families at risk has decreased. Deseret News

*Senator Wayne Niederhauser pitches his bill on grading schools to Utah’s Education Excellence Commission. Niederhauser spoke previously to the State Board of Education that said it’s not a good time to implement such a system because they are in the middle of a curriculum overhaul. They also expressed concern that it was an oversimplification. KSL

*Another embattled US Senator is expected to announce his retirement today. Joe Lieberman, the Independent from Connecticut who caucuses with the Democrats, is holding a press conference at his home this afternoon. He will join Senator Conrad from ND and Senator Hutchison from Texas who announced their resignations during the last week. In the 2012 cycle, Dems will have to defend 23 seats while the GOP only has 10 up for re-election. The GOP only needs to net 3 seats to regain the majority. The Hill

*And if none of that interests you, well, here’s a little echo chamber piece on people who get up early to scan the news and compile the best stories into summaries to show to other people. Hmm. Who knew. New York Times


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