Category: Government workers and pensions
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How to Look Fiscally Responsible While Being Fiscally Irresponsible
Governor Ralph Northam wants to boost the retiree health credit for state police, law officers, sheriffs and their deputies. He has included $8.1 million in his proposed FY 2020 budget to pay for a $2-per-year of service increase for state police and a $1.50- to $5-per year increase for sheriffs and deputies. While the increase…
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Fairfax Supervisors Face County’s Monster Pension Crunch
Once upon a time, way back in the year 2000, Fairfax County’s general-employee pension plan was amply funded at 109% of projected needs. But the funding ratio dropped severely during the last recession and has been hovering around 70% in recent years. Today unfunded pension liabilities for Virginia’s largest local government are roughly comparable in…
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Virginia Unfunded Liabilities: $5.4 Billion
Here is more confirmation, as if any were needed, that the Commonwealth of Virginia is running hidden deficits in the form of unfunded pension and retiree healthcare liabilities… Truth in Accounting, a nonprofit devoted to transparency of government finances, gives Virginia a grade of “C” for its financial practices. By the standards of the 50…
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A Thoughtful Reminder of Another Pension Landmine
A recurring theme of Bacon’s Rebellion is that billions of dollars of liabilities lurk in the balance sheets of Virginia’s state/local government and quasi-governmental organizations — from the $20 billion unfunded pension liability of the Virginia Retirement System to the $3.5 billion unfunded pension liability of the Washington Metro system. Some don’t get the attention they…
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Virginia’s Highest-Paid State Employees
The Washington Business Journal has just published its database of the highest paid state employees in Virginia, and the list is dominated by people you never voted for, or in many cases people you’ve never even heard of. For the most part, the highest-paid state employees work for colleges and universities — not just any…
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Is Lower Pay for Federal Workers a Good Thing or Bad Thing for Virginia?
It’s no surprise that Barbara Comstock, the Republican congresswoman running a super-competitive re-election bid in Northern Virginia, has expressed her opposition to President Trump’s public ruminations that maybe he should cancel a 2.1% pay raise for federal government employees. After all, her district is chock full of federal employees, and she had distanced herself from…
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Unfunded Pension Liabilities a Benefits Problem, Not Just a Funding Problem
In the analysis of unfunded state pension liabilities, there are two main components: assets and liabilities. Here in Virginia, most attention is focused on the asset side of the equation — how much money have state and local governments set aside to pay for retiree benefits, and how well is the Virginia Retirement System managing…
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State Employees Not Funding Own Retirement
State and local employees, like many of their peers in the private sector, are declining in droves to contribute to their own retirement plans, despite the availability of matching funds, a.k.a. free money which compounds for decades. The Virginia Retirement System has been putting new hires into a hybrid retirement plan that combines a defined…
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State Pension Problems Still Getting Worse
Another year, and another analysis by the Pew Charitable Trusts on the deteriorating condition of U.S. states’ public employee pension plans. Drawing on data from 2016, Pew concludes that despite scattered actions by the 50 states to shore up their pensions, the funding gap only got worse. In 2016, the state pension funds in this…
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Bacon Bits: Film Flam, State Workers, Fun & Games with Chicago Debt
Film incentives a money loser for state. Incentives for producing films in Virginia doubled under the McAuliffe administration, reaching $14.3 million in 2015-2016 and totaling $43 million over five fiscal years. But Virginia’s film industry has returned about 20 cents for every dollar it received in tax credits and 30 cents for every dollar in grants over…
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VRS Earned Above-Average Return in Fiscal 2017
A welcome piece of good news from state government: The Virginia Retirement System earned an 11.8% return on investment for the fiscal year ending June 30. The performance exceeded the 7% average return the system assumes for purposes of setting state and local contributions, and it is a big improvement from the previous two years.…
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UVa Attacks Administrative Bloat in HR Consolidation
The University of Virginia has downsized its Human Resources staff from 270 employees to 240, and could slim down by another 40 full-time-equivalent positions as it merges the HR departments of its academic and medical divisions, reports the Daily Progress. The staff restructuring project, which UVa calls UFirst, is part of the university’s multi-year Cornerstone Plan,…
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Virginia Pension Liability Gap: Still Worrisome
Another year of tepid economic growth and another year of no progress on Virginia pension liabilities. Nationally, the gap between liabilities and assets for state pension systems grew 17% in fiscal 2015, reaching $1.1 trillion, according to an annual survey by the Pew Charitable Trusts. Under-performing investments was the biggest driver, accounting for $125 billion…
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What the Obama Giveth, the Trump Taketh Away
The federal budget sequestration may have kept a lid on escalating federal budget deficits, a good thing, but it was a disaster for Virginia’s economy. The cap on federal spending hammered a Northern Virginia economy built largely around the Pentagon. The ascension of Donald Trump to the presidency signaled a possible return to the region’s…
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The Biggest Lie of All: Government Can Pay Its Pensions
Many people get infuriated by President Trump’s many inconsequential falsehoods — does it really matter how big his inaugural crowds were? — but they remain sanguine about the trillion-dollar untruths that our public pension system is built upon. The big lie that governments will make good on retirement promises to their employees is not merely mendacious but it is…