Tag Archives: government pensions

Oregon governor chooses demorat donor to manage PERS disaster, donor has no pension experience

Shenoy (l) being rewarded for donating to Gov. Brown (r)

The State or Oregon Public Employees Retirement System (PERS) is in a big financial hurt. In February 2017 it had $22 BILLION in unfunded liabilities, owing more money to former employees than they have in the bank.

In April this year, the New York Times did a story on Oregon’s PERS calling it a “severe, self-inflicted crisis.”

Read the whole New York Times story here as they describe how a former university president draws $76,111 per month, a former football coach draws more than $46,000 per month, and that more than 2,000 employees will soon draw a monthly pension in excess of $100,000 per month.

As a result of the financial crisis of PERS, many essential government services are “slashed.”

So who better to manage this whopping financial crisis? A former CFO and accountant who has a background in pension management information technology.

Last Thursday, the governor announced she chose Sadhana Shenoy to lead the PERS board as “she’s extremely bright” and has “great technical expertise.”

Shenoy will need to be confirmed by the state senate.

According to Oregon Live: “…Shenoy lacks any direct experience in pension management or administration. That’s experience that governor’s office originally said it was looking for in a new board chair, and background that could come in handy at a time when the administrative complexity and political profile of the system are rising.

Shenoy said, “I have the technical skills and background to lead a board oversee (sic) the management of PERS Funds with responsibility, acumen and foresight. These skills include a sound background in Finance, Accounting and Mathematics and working proficiency in modeling tools and techniques.

One interesting item that Oregon Live reports: “With Thomas’ resignation and Shenoy’s confirmation by the Senate, it (the PERS Board) would be made up entirely of Portland-area Democrats – one a union leader and two others, including Shenoy, who are donors to Brown’s campaign.”

The PERS Board is supposedly a “bipartisan” entity. Well, as much as it can be in progressive Oregon.

Read the whole Oregon Live story here.

While I understand that donors are typically rewarded with posts, is it too much to ask that taxpayer pension dollars be managed by people who have actual experience with pension management?

Most of the people commenting on the Oregon Live article are not pleased with the Governor’s choice. Elections have consequences.

DCG

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Chicago mayor prepares large property tax hike

Take a wild guess as to which party was in charge during all the years the city’s financial troubles piled up.
Incoming White House Chief of Staff Rahm Emanuel gestures prior to inauguration ceremony of Barack Obama as President of the United States in Washington
Yahoo: After watching for years as their city’s financial troubles piled up, Chicago homeowners will be told this week that it’s time for them to start paying the tab. Mayor Rahm Emanuel is expected to propose a $543 million property tax increase on Tuesday to help eliminate pension debt, along with a schools tax for construction, according to details released late Monday by the administration.
Residents will also face more taxes and fees on garbage collection, ride-sharing services and e-cigarettes, all with the goal of easing a budget hole and repairing low credit ratings.
The steps would help reverse the city’s financial slide but could dent Chicago’s reputation for a relatively affordable cost of living. Median home prices in the nation’s two larger cities, New York and Los Angeles, are double Chicago’s.
“There’s no way around it,” said Alderman George Cardenas of the additional taxes. “If we don’t face the consequences, you pay more (later), your children will pay more and that’s no way to run a city.”
It’s unclear how residents and businesses will respond. Emanuel has faced raucous crowds at public budget hearings, but the political fallout for the former chief of staff to President Barack Obama could be delayed because he doesn’t face re-election until 2019.
lauren bacall
Some homeowners, landlords and business owners complain they already pay more than other cities in gasoline prices, sales taxes and parking. Chicago’s sales tax rate is 10.25 percent, the nation’s highest.
“Paying for picking up garbage? That’s ridiculous. That’s what my taxes are for,” said homeowner James Young, 48, who works for a textile company. “Your pay check doesn’t increase every time the taxes increase.”
However, there have been few signs the proposal would fail in the City Council, which has largely been a rubber stamp for the mayor.
Chicago’s property tax rates rank 12th nationwide, higher than Los Angeles and New York, but higher property values in those cities mean property owners pay thousands more a year, according to a Lincoln Institute of Land Policy study.
Laurence Msall, executive director of the Civic Federation, a tax and policy research organization, said the key will be persuading Chicago residents that the additional revenue will be used correctly.
the-laughing-funny-cat
“One of the biggest problems is not the tax increase but the reaction to the tax increase,” Msall said. “If people don’t think we’re going to solve things, they will leave.”
The city’s financial problems have been mounting because of inadequate contributions to the pension system and questionable borrowing, mostly under former Mayor Richard M. Daley.
Chicago has the worst-funded public pension system of any major American city and a budget shortfall of at least $750 million. Illinois’ governor, Republican Bruce Rauner, has even suggested that the city school district — which credit rating agencies have rated at “junk” status — declare bankruptcy.
Emanuel has cut government costs and sought other ways to raise revenues, such as a bringing casino gambling to the city, but without success. Emanuel’s office announced ahead of Tuesday’s budget speech that the property tax will be phased in through 2019 and put toward police and fire pensions. Emanuel’s aides estimated that it would cost a resident with a $250,000 home roughly $540 more a year. Chicago saw property taxes rise in 2008, but the last major increase was in 1987.
Emanuel also plans to ask council members to approve a $45 million tax for Chicago Public Schools, along with a $9.50 per-dwelling garbage collection fee, higher costs for ride-sharing services and taxis, and a tax for e-cigarette liquid.
The revenue push comes as Emanuel attempts to strike a softer image, conceding during his re-election campaign earlier this year that his bullish style turned off some people. The mayor dropped hints that he’ll seek property tax exemptions for low income and elderly residents. But state approval is needed for the tax hike and exemptions.
“We are going to address our challenges, and I think when the governor looks at the whole budget he will see that we didn’t leave any stone unturned,” Emanuel said. “It is fair, it is equitable. It’s progressive.”
electionshaveconsequences
DCG

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Illinois justices overturn state's landmark 2013 pension law

 
kick the can down the road
MyFoxChicago: The Illinois Supreme Court on Friday struck down a 2013 law that sought to fix the nation’s worst government-employee pension crisis, a ruling that forces the state to find another way to overcome a massive budget deficit.
In a unanimous decision, the seven justices declared the law passed 18 months ago violates the state constitution because it would leave pension promises “diminished or impaired.”(As if a $111 BILLION deficit isn’t an impairment.)
math is hard
The decree puts new Republican Gov. Bruce Rauner and Democrats who control the General Assembly back at the starting line in trying to figure out how to wrestle down a $111 billion deficit in what’s necessary to cover its state employee retirement obligations. The hole is so deep the state has in recent years had to reserve up to $7 billion — or one-fifth of its operating funds — to keep pace.
Most states faced the same public employee pension crisis, exacerbated by the Great Recession, and took steps to remedy the problem. But Illinois balked for years at addressing the crisis until former Democratic Gov. Pat Quinn and fellow Democrats who control the General Assembly overcame opposition from union allies and struck the 2013 deal, amid warnings that it might not pass constitutional muster.
After the General Assembly and Quinn adopted the changes in December 2013, retired employees, state-worker labor unions and others filed a lawsuit seeking to invalidate the law on constitutional grounds. The high court opinion means the state must keep its pledge on pensions.
The law dealt with four of the state’s five pension programs — the Legislature did not include the judges’ account because of the conflict posed by expected legal action. The shortfall in the amount of money necessary to meet all pension obligations has reached stifling depths largely because of years of skimping on — or skipping — on annual pension contributions by past governors and General Assemblies.
It would have crimped pensions perks in several ways in an effort to erase the shortfall by 2044. Perhaps most significantly, it would have erased the 3 percent compounded cost-of-living adjustment added in 1989, replacing it with a formula that gave the increases on a portion of benefits, depending on years of service. Some would have had the option of freezing their pensions and contributing to a 401(k)-style plan.
It also would have delayed the retirement age for workers aged 45 and younger, on a sliding scale. Workers would have had to contribute 1 percent less to their retirements and the pension agencies would have been allowed sue the state if it didn’t contribute its full annual portion to the funds. Those were additions to help the matter survive a court challenge.
At the March argument before the high court, the opponents to the law argued that the constitution’s language was clear — promised pensions could not be reduced.
State lawyers contended the government had the right to exercise “police powers” in time of crisis, and that the 2008 recession, which decimated retirement fund investment portfolios, provided the crisis. But under close questioning from the bench, the state’s lawyer acknowledged that past governors and legislatures shorted pension payments to save money in the short term.
Even if this pension reform stood the test of court, it wouldn’t have helped. From January 2014:
“A reform package passed late last year will make improvements to Illinois’ woefully underfunded public pension system, but the state’s budget gap still will increase to $13 billion by 2025 if current policies remain in place, according to an independent analysis released on Tuesday.
While the pension reforms are expected to save Illinois $160 billion over 30 years, they will reduce the state’s structural budget deficit only by $1 billion to $1.5 billion a year over the next decade, according to the report by the Institute of Government and Public Affairs at the University of Illinois’ Fiscal Futures Project.
That would leave the state with a projected budget gap of $3 billion in 2015, growing over the next 10 years to $13 billion. The projected shortfall is just $1 billion less than the $14 billion deficit the report projects Illinois would face without pension reform.
“The pension revision law of December 2013 was a huge step in the direction of fiscal stability for Illinois,” the report said. “Unfortunately, the state’s fiscal problems are so great that much still remains to be done.”
reality
DCG

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Weiner’s Package is Worth $1.3 M

No wonder politicians, once elected, almost never leave office of their own volition. Instead, they cling to their office and are removed only by a sex scandal or the grim reaper. Being an elected politician is that sweet a deal.

NY Democrat Congressman Anthony Weiner is the flasher and liar who had so little to do in his job that he had the time to take and send pics of his erect penis and testicles, and of himself — hand over crotch — in various stages of undress in the Congressional gym. Yesterday, Weiner finally said he will resign from the House of Representatives.

But you needn’t feel sorry for the exhibitionist.

According to an analysis by the National Taxpayers Union, Mr. Flasher will still make out like a bandit. Weiner’s pension and other benefits can total more than $1 million during his lifetime.

John Stanton of Roll Call delivers the bad news, June 16, 2011:

According to an analysis of his available benefits by the National Taxpayers Union, the New York Democrat’s pension and a savings plan lawmakers have access to similar to a 401(k) could be worth $1.12 million to $1.28 million.

At 46, Weiner will not be eligible for his pension for another decade, at which point he could begin drawing a reduced rate of $32,357 a year, according to NTU. If he waits until age 62 to begin drawing his pension, he will receive his full benefits, or $46,224, according to NTU’s calculations.

Sorry to ruin your Friday.  🙁

~Eowyn

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