May 22, 2018
More state revenue but less money for public services?
That’s the situation in which states with large unfunded pension obligations can find themselves if they don’t take significant steps to address those shortfalls. And that situation, bad as it is, could quickly get worse.
February 27, 2018
This week, the U.S. Supreme Court heard oral argument in case Janus v. AFSCME, which could significantly impact unions representing government employees. A ruling in favor of plaintiff Mark Janus, an Illinois social service worker, would free public employees across the country from being required to pay for union representation as a condition of employment.
February 6, 2018
Public pension shortfalls result from too little money being paid into the pension funds. Or so government employee unions and their political allies would have you believe, when they ask taxpayers to pony up more to pay for pension benefits. Yet left out of this picture is the growth of those benefits.
January 16, 2018
Addressing the underfunding of public pensions is difficult enough on its own. Reformers routinely face opposition from government employee unions and their political allies. But that’s not all. In 12 states, even when the political will exists and the public may seem willing to support reform, a formidable legal roadblock stands in the...
January 11, 2018
The real measure of future taxation is the projected level of government spending. That simple truth makes filling the funding gaps of public employee pension funds crucial for states’ and municipalities fiscal health—as well as for the well-being of taxpayers who rely on the public services their taxes are supposed to pay for. Every...
December 18, 2017
How do you make a bailout not look like a bailout? Call it a loan.
The recently introduced Butch Lewis Act (S. 2147) would put taxpayers on the hook for billions of dollars in unfunded pension liabilities under the guise of loans from the U.S. Treasury....
October 11, 2017
Politicians often like to kick the can down the road when it comes to debt. Few things illustrate that better than the large pension deficits many state and local governments around the country are now facing. That’s not surprising, given the temptation to pass the bill on to future office holders.
Yet, the pain isn’t all in the future. As a new study from Stanford University’s Institute for Economic Policy Research shows, increasing pension payments are straining California cities’ finances in the here and now. Steven Greenhut of the California Policy Center describes the extent of the problem:
[T]here’s a huge, current problem even for the bulk of...
September 14, 2017
Yesterday, Missouri State Treasurer Eric Schmitt announced that the state’s public employee pension plan was underfunded by $5 billion. That is an eye-popping amount, but the story is a sadly familiar one:
The treasurer placed blame on the retirement issue on past administrations for what he said were unreasonably high expectations of investment earnings. Schmitt said returns have been below predictions for 16 of the past 17 years.
According to data from the Missouri State Employees’ Retirement System, investment returns have averaged close to 7 percent over the past 20 years. Returns have been lower in recent years, averaging close to 4.5 percent over the past 10 years and less than one percent over the...
December 12, 2016
This week on RealClear Radio Hour, Marc Edwards and Dan Liljenquist recount politically induced disasters from the perversion of science to the pension crisis.
My first guest is Marc Edwards, Professor of Environmental and Water Resources Engineering at Virginia Tech. Marc discusses institutional scientific misconduct in academic and government-funded science and details how the U.S. Environmental Protection Agency and Centers for Disease Control and Prevention created and covered up both the D.C. and Flint, Michigan, lead and drinking water crises. He describes how upper management cultivates a culture of corruption to promote their policy agency agenda, risking loss of public trust in science.
October 19, 2016
State public pension plans are underfunded by nearly $5.6 trillion nationwide, according to a new American Legislative Exchange Council (ALEC) study. Naturally, the level of pension funding and the size of liabilities vary widely across states. Given that, the new ALEC report provides useful comparisons based on three criteria:
- Funded ratio;
- Total unfunded liabilities; and
- Per capital unfunded liabilities.
In terms of funding ration, Wisconsin scores the best, at 63.4 percent funding, the only state with a ratio above 50 percent. Connecticut scores worst, at 22.8 percent.
Vermont has the nation’s smallest total pension obligation sum, at $8.7 billion; California the greatest, at $956 billion.
Of course, Vermont is a small state...