Contracts

How pension reform shrinks R.I. deficit

Rhode Island Governor-elect Gina Raimondo rose to political prominence engineering a difficult pension reform in the Ocean State back in 2011. Now one of her challenges as governor will be grappling with a state budget deficit that, by her calculation, will be much larger if the courts overturn those reforms after a long legal battle…

Colorado court: Things go better without COLA

Something that initially escaped my attention. The Colorado Supreme Court recently restored a measure of fiscal sanity to public sector retirement law in the Centennial State by reversing a Court of Appeals ruling which said that the state could not cut cost-of-living adjustments to help …

California: Premium pay for ordinary duties

The LA Times has a follow-up story on the August vote by the Calpers board to approve 99 categories of additional pay that government employees in the Golden State can use to boost the amount of their salary that counts toward their final pension. While the major import of the story is the way Calpers undermined modest pension reforms signed into law in 2012, it’s fascinating to see just what kinds of tasks earn government workers “premium” pay…

Philly: More dubious budget reporting from NYTimes

The NY Times finally decided to jump in with its take on the controversial story of Philadelphia’s school reform commission cancelling the teachers’ contract. Not surprisingly, in a story largely sympathetic to teachers (pointing out, for instance, that they make less in salary than neighboring suburban teacher) the Times ignores most of the relevant fiscal facts…

Health care + pensions equal insolvent NJ

New Jersey has gotten a lot of publicity lately because Chris Christie has balked at meeting the state’s extraordinary pension burden, arguing that further reform of the system is necessary. But as a recent NJ report makes clear, Jersey really has a problem of expensive health care for workers and retirees on top of bulging pension debts, which have raised the cost of employee benefits in NJ well above the norm for states. The reason Jersey isn’t paying all of its benefit costs is because it couldn’t possibly afford to…

Watch door to bankruptcy slam shut to protect pensions

In the wake of Judge Klein’s ruling last week that Stockton could cut pension debt in bankruptcy, fiscal reformers and conservative commentators where quick to assume, somewhat naively, that this ruling changed everything and would force recalcitrant unions to the negotiating table. The truth, however, is that many states put up numerous roadblocks to municipal bankruptcy and the real import of the ruling was that states where public unions dominate were likely to throw up even more blocks. Now we’ve seen the first indication of this…

Philly goes nuclear, cancels teachers’ contract

nocontractIn a startling move against an intransigent union, the special commission that manages the Philadelphia school system has cancelled the system’s teachers’ contract and imposed reductions on benefits costs to salvage the budget of the badly indebted system. The move, in which the Philadelphia School Reform Commission invokes emergency powers, comes after the teachers’ union spent more than a year resisting concessions…

Superintendents behaving badly

If a community can’t trust a public employee, can its elected representatives fire that person?
A lawyer defending a former Brookfied, Conn., superintendent on Tuesday argued the answer is no, not legally.
Recently, a number of superintendents in Connecticut have been sent to the principal’s office – …

Pensions: When you can’t trust the trustees

Last week the board of trustees of Calpers, dominated by six beneficiaries of the pension fund, voted to essentially undue some of Jerry Brown’s modest 2012 pension reforms with their liberal interpretation of the new rules. I have a piece in the LA Times today describing how this is not just a California problem. Many pension funds are directed by boards dominated by beneficiaries…

Audit fires up New Orleans’ pension controversy

Should taxpayers be responsible for soaring costs in a pension fund that has been mismanaged by its trustees, many of whom are government workers elected by their colleagues to run the retirement system? That’s the debate playing out in New Orleans, where Mayor Mitch Landrieu …