The pension system’s board assumes a 7.75 percent return on the millions it has invested. For many years, it met and even exceeded that rate of return. But the 2008 stock market crash ended up reducing the pension system’s returns in fiscal year 2009 by 18.7 percent and 11.1 percent the next year.
It was, said Low, “a shock to the system,” and because there’s a limited number of years to smooth out that shock, the state now has to basically double up its payments to comply with the constitutional mandate.
While the 7.75 return rate is near the same number all the other states’ pension systems used (and some were as much as a half-point higher), Monks, a founding trustee of the federal employees retirement system, said, “Any damn fool should have realized there would be a bump in the road in the seemingly upper hypotenuse of equity returns.” How Did State Pension Debt Happen?, BDN, 7/28/10
Seems like sort of a punk’s mistake, doesn’t it, figuring on that rate of return, on into infinity?
Officials with the Maine Public Employees Retirement System announced earlier this month their projections for how much the state will have to pay to maintain the system for current employees plus pay down past debts. All told, the cost to the state in the 2012-13 budget will be $916 million, which is $287 million more than in the current biennium. The cost is scheduled to increase significantly every year until 2028, which is when the past debts are required to be paid by the Maine Constitution. By 2020, according to that schedule, payments by the state will top $800 million a year. Retirement fund plagues budget, BDN, 7/24/10
Does anyone want to bet that the figure of $800 million is accurate? Stick around and see!
Now doubt you’ll have your own favorite part; mine is this:
“I think it is kids’ preference to pair up and have that one best friend. As adults — teachers and counselors — we try to encourage them not to do that,” said Christine Laycob, director of counseling at Mary Institute and St. Louis Country Day School in St. Louis. “We try to talk to kids and work with them to get them to have big groups of friends and not be so possessive about friends.”
“Parents sometimes say Johnny needs that one special friend,” she continued. “We say he doesn’t need a best friend.”
Here’s the crux:
That attitude is a blunt manifestation of a mind-set that has led adults to become ever more involved in children’s social lives in recent years.
This nonsense is unfortunately exemplary of the hideous deals that all too many “counselors” try to work in schools; it’s their full employment program. That parents go along is in part a reflection of their unwillingness to act as independent adults themselves.
And the touchy-feely counselor types somehow get off on manipulating children and parents.
Noteworthy that The Times places this article in the Fashion & Style section!
You may recall a peculiar situation in SAD 27, the school district centered on Fort Kent, in which, rather than voting on their school budget on June 8, Primary Day, the school board chose to have a separate referendum date of June 10.
The explanation for this timing was fascinating, demonstrating to this reader that our beloved mother language is rich in possibilities for slickness and obfuscation.
“Several board members were fearful holding the budget vote the same day [as the primaries] would mean the budget would get voted down,” Dr. Patrick O’Neill, district superintendent, said Monday. “I know some board members and town officials are unhappy with that.”
Among them is Louis Moreau, chair of the Fort Kent Town Council.
“The intent is obviously to cut down on the number of voters at the polls,” Moreau said. “Not only will a separate vote create an additional cost to the towns, but it would have been more beneficial to the voters if both votes were on the same day.”
…
James O’Malley, SAD 27 board of directors chairman, said it is not the intent of the board to circumvent any democratic process.
Rather, he said, members wanted to ensure that residents who care and are informed decide the budget.
“We recognize it can be an inconvenience to have two votes,” O’Malley said. “But we like the idea that if people are concerned about the school budget and interested in it they will come out and vote.”
What some board members did fear, he said, was any backlash against a proposed district budget stemming from state referendum questions.
“If people are dissatisfied with the [state] referendum questions, that momentum can be carried over to the school budget,” O’Malley said. “But if people make the effort to go out and vote on the budget, it shows they are really concerned, [and] we want to be sure it is the people most concerned with the budget who come to vote.”
Can’t you almost hear “So that the wrong sort of people don’t vote”?
A number of voters seemed to hear this message, and they were offended.
Be that as it may, in fact the school budget passed, with about 60% voting in favor.
It’s to avoid “massive layoffs of teachers, police and firefighters” don’t you know.
And, it’s
…a great example of the “Washington Monument Syndrome.” This refers to the bureaucratic practice of threatening to close down the most popular and vital programs in response to prospective budget cuts; it gets its name from the U.S. Department of the Interior, which always threatens it will have to close the Washington Monument if its budget is cut.
The message, in this case, is that if taxpayers — who are already poorer than they used to be — don’t give the states billions of dollars on top of the billions already received through the stimulus, our favorite state employees will end up in the streets without jobs. The goal is obviously to cause enough public outrage to give cover for lawmakers to pass another job bill — in spite of the obvious failure of the previous ones. Veronique de Rugy, “Washington Monument Strategy Alive and Well in Washington,” The Corner, 6/14/10
This should be familiar to almost every voter.
It occurs in every school district, where, when cuts loom, the prospect of cutting a popular sports program, or music program, or an after (or before) school program, is used to stir up a constituency, to “save the program”, with a greater burden assumed by the taxpayers “for the sake of the kids.”
Hereabouts, we call it the “Let’s Cut Soccer Syndrome!”
Look for this manipulative ploy more often, as economic realities intrude on the surreal half-world of education funding.
The Department of Education was created as a straight political payoff to the teacher’s unions by President Jimmy Carter (in return for their 1976 endorsement). According to the National Center for Education Statistics, DE’s original budget, in 1980, was $13.1 billion (in 2007 dollars) and it employed 450 people. By 2000, it had increased to $34.1 billion, and by 2007, more than doubled to $73 billion. The budget request for fiscal 2011 is $77.8 billion, and the department employs 4,800.
All of this spending has done nothing to improve American education. Between 1973 and 2004, a period in which federal spending on education more than quadrupled, mathematics scores on the National Assessment of Educational Progress rose just one percent for American 17-year-olds. Between 1971 and 2004, reading scores remained completely flat.
Comparing educational achievement with per pupil spending among states also calls into question the value of increasing expenditures. While high-spending Massachusetts had the nation’s highest proficiency scores on the National Assessment of Educational Progress, low-spending Idaho did very well, too. South Dakota ranks 42nd in per pupil expenditures but eighth in math performance and ninth in reading. The District of Columbia, meanwhile, with the nation’s highest per pupil expenditures ($15,511 in 2007), scores dead last in achievement.
The past few years have seen an absolute change in the correlation of forces. It used to be that a few policy wonks would write essays assailing union rules that protected mediocre teachers; these pronouncements were greeted with skepticism in the media and produced no political movement. Now powerful political players, most notably President Obama, are making such arguments. The unions feel the sand eroding under their feet. They sense their lack of legitimacy, especially within the media and the political class. They still fight to preserve their interests, but they’ve lost their moral authority, as we’ve seen in New York City, Denver, Chicago, and even Washington, D.C.
Of particular interest are application pages 34 to 37 (numbered 33- 36 in the document), where the “Participating LEAs” are listed. You be sure to check and see if your particular educational services delivery unit is listed!
As you read these 597 pages I know there are some you’ll find boring, but there will be others that you really enjoy. I especially like application page 13 (page 12 in the document), reproduced in part below, where the Governor, the Acting Commissioner, and the Chair of the State Board of Education avow that each has “read the application, [is] fully committed to it, and will support its implementation…”
It gives me a good warm feeling to know that they’ve read the whole thing. Must have kept them off the streets and out of trouble for quite a while — kind of like an after-school program for our public servants.) Be sure to ask about it next time you see them!
P.S. If you had an appendix that large wouldn’t you do something about it?
P.P.S. Does not the sheer size of this monster portend the monstrous, indeed “ginormous“, bureaucracy it will create?
Here’s another item that may alarm. YouTube has taken down a bunch of parodies that employed a certain sequence from the movie, Downfall. Censorship of any sort is alarming of course. This particular parody, you should be warned, contains coarse language. Lots of it. Hitler reacts to the Hitler parodies being removed from YouTube
This is a kind of week-end cleanup of bits and bobs of stories on hand. Think of it as Downeast’s really big pile o’ stuff.
Clock ticking for union-inspired panel on assessing teachers The recently-passed law allowing student performance to be linked to teacher evaluation — so Maine could/might be able to get Race to the Top money — seems not to have completely done the job. This panel is somehow supposed to help things along. Cynical old me doubts it. Notice who isn’t at the trough table? The public. Yep, the professionals know best. Always.
Here’s an item that’ll send a chill up someone’s spine:
After weeks of protest and a deluge of messages, Gov. Charlie Crist on Thursday vetoed a bill that would link teacher pay to student test scores and wipe out tenure for new teachers.
“I know in my heart it’s the right thing to do,” Crist said of his veto.
The issues we’re following in Maine — the state budget (especially its education component), taxation issues, and local budgets — with all their accompanying discussions of cuts and program viability, and finger pointing, have their corresponding discussions in nearly every other state. Some of these discussioins are louder and more fractious than the hubub here. The other states too are discussing teacher accountability, teacher pay, pensions, student performance, and education’s future direction.
Today we cast our eye on New Jersey, where, just as in California, the pension system is bankrupt
Here’s the basic shape of things:
Budgets are serious business, but it’s been a long time since anyone in New Jersey has been serious about the budget. This year, gross mismanagement and accumulated fictions have left state taxpayers a $10.7 billion gap on a total state budget of $29.3 billion.
We excerpt from this account ( William McGurn, “Reaganism, New Jersey Style,” Wall Street Journal, 4/12/10) the aspects of this gruesome butchery most relevant to the education racket:
…when you have to cut nearly $11 billion in state spending to get there, you are going to get a lot of yelling and screaming. Most comes from the New Jersey Education Association, hollering that “the children” will be hurt by Mr. Christie’s proposals for teachers to accept a one-year wage freeze and begin contributing something toward their health plans.
… [Arguments Christie is answering are in italics; quotations are his responses to these arguments.]
The children will be the ones to suffer from your education cuts. “The real question is, who’s for the kids, and who’s for their raises? This isn’t about the kids. Let’s dispense with that portion of the argument. Don’t let them tell you that ever again while they are reaching into your pockets.”
…
Budget cuts are unfair. “The special interests have already begun to scream their favorite word—which, coincidentally, is my 9-year-old son’s favorite word when we are making him do something he knows is right but does not want to do—’unfair.’ . . . One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life, and nearly $500,000 for health care benefits—a total of $3.8 million on a $120,000 investment. Is that fair?”
State budget cuts only shift the pain to our towns. “[L]et’s remember this, in 2009 the private sector in New Jersey lost 121,000 jobs. In 2009, municipalities and school boards added 11,300 jobs. Now that’s just outrageous. And they’re going to have to start to lay some people off, not continue to hire at the pace they hired in 2009 in the middle of a recession.”
Hmmm. This would be entertaining if the stakes were not so high. McGurn notes that no governor has ever turned around a state so “overtaxed and overspent.”
Christie is playing hardball, in part because he, and many who voted him in, see no alternative. In any case, New Jersey, like California, may be the proverbial canary in the mine. As New Jersey goes, so goes Maine?
The intransigence of the MEA on teacher accountability (so called) may push the public past its limit of tolerance. The public may decide it has had enough, that drastic actions are needed, and it may begin to elect officials who will wield the knife in a way we haven’t seen before. And, regardless of their personal philosophy, circumstances may force reluctant officials to take these measures.
We don’t suggest that Maine is in as much trouble as these other states. We do suggest that we likely have not yet seen the bottom of this recession, that officials and public employees need to be sensitive to public perceptions, and that in any case, we’re in for a bumpy ride.
Gov. Chris Christie is making good on his promise to get tough with New Jersey’s $2.2 billion budget gap — by taking aim at one of the drivers of the state’s out-of-control taxes: school budgets.
Under Christie’s budget, New Jersey’s 605 school districts will see their state aid reduced by 5 percent of their last budget. That trims state spending by $820 million, forcing school districts to make deeper cuts or raise property taxes.
If it stopped there, Christie’s one-time aid cut would do nothing but aggravate property-tax payers. But he’s also seeking a constitutional amendment on the November ballot to lower the property-tax cap from 4 to 2.5 percent — preventing localities from guzzling at the local revenue tap while blaming it on Trenton’s stinginess.
Federal stimulus money let Jersey avoid major spending cuts the last two years — but now the state is broke. And school budgets have plenty of fat to lose. They’ve been growing evermore bloated since 1976, when the state Supreme Court more or less forced New Jersey to institute an income tax to fund what the court deemed more equitable school spending.
Supplementing school budgets with state aid was supposed to control property-tax hikes while leveling the disparity between wealthy and poor school districts. Instead, it turned into a revenue boon for the state’s teacher union, the New Jersey Education Association. Slicing NJ’s schools
Biff! Pow! Bam! The writing’s on the wall!
For on the wall, there appeared a hand,
Nothin’ else, there was no man.
In blood the hand began to write,
And Belshazar couldn’t hide his fright.
For he was weighed in the balance and found wanting,
His kingdom was divided, couldn’t stand.
He was weighed in the balance and found wanting,
His houses were built upon the sand.
– Belshazzar, Johnny Cash
