IL: Emperor has no clothes: Pensions are short cash

Illinois politicians are at it again. They're borrowing from the future to make state pension contributions today. Illinois has one of the most underfunded public pension plans in the nation.

When boomers start retiring, there won't be enough money to pay those pension promises. Both political parties are still trying to hide the magnitude of the problem.

In early January, while everyone was busy watching the nasty campaign commercials, the State of Illinois pulled an end-run on the budget process. On Jan. 7 the state sold $3.5 billion of "pension obligation notes." In simple English, the state borrowed money to finance the state's contribution to its five retirement systems.

Public employee benefit plans: Up to $1 Trillion in unfunded liabilities

For years, employers in the private sector have been moving in the direction of versatile, 401(k) style retirement accounts. However, a vast majority of the 20 million state and local government workers in the U.S. have kept their generous, defined-benefit pension plans.

Despite the lofty promises made by policymakers, public employee retirement plans have been neglected over the years and have become huge liabilities that severely threaten the financial health of many states. If legislators do not properly address the crisis in public pensions, they will make current state budget problems look trivial. In fact, as of 2006, states had accumulated nearly $360 billion in unfunded pension obligations, according to a new 50 state study conducted for the American Legislative Exchange Council (ALEC). The report entitled “State Pension Funds Fall Off a Cliff,” is co-authored by Dr. Barry Poulson of the University of Colorado and Dr. Arthur P. Hall of the University of Kansas.

Schools face big budget holes as stimulus runs out

SAN FRANCISCO – The nation's public schools are falling under severe financial stress as states slash education spending and drain federal stimulus money that staved off deep classroom cuts and widespread job losses.

School districts have already suffered big budget cuts since the recession began two years ago, but experts say the cash crunch will get a lot worse as states run out of stimulus dollars.

The result in many hard-hit districts: more teacher layoffs, larger class sizes, smaller paychecks, fewer electives and extracurricular activities, and decimated summer school programs.

Public sector: An anchor as we sink

Want an example of what union muscle and big deficits can do? Greece.

R.I.’s 10 enterprise zones face extinction

To J. Alan Crisman, the state’s enterprise zone program has been crucial to drawing businesses into Bristol and Warren and keeping them there.

Crisman, administrator of the Mount Hope Enterprise Zone that covers some neighborhoods in both towns, said last week that dozens of small companies located in the special economic district have taken advantage of tax credits over the years and created dozens of jobs.

Pawtucket still scrambling to balance books

PAWTUCKET –– More than 40 city employees laid off across every department in the past two years. A new wage freeze for the rest, along with unpaid furlough days and an increase in health-care benefit costs. A money-losing municipal ice skating rink sold off.

These are some of the steps the city administration has taken in the face of projected multimillion-dollar city and school deficits in the budget year that ends June 30 and the one that begins July 1.

As Mayor James E. Doyle talked in his office recently about what’s happened and what may happen, he pointed to a framed photo of the Lincoln Memorial on the wall behind him that bore a message about how great leaders take people to where they want to be.

Sick-days court ruling upheld

JOHNSTON — The town’s police officers can accumulate up to 240 unused sick days during their careers. Then, according to the police union, they can take those days off with pay just prior to retirement while continuing to add to their time on the municipal payroll, a key component in calculating their pensions. Town officials strongly disagree with that interpretation of the contract and the matter went to arbitration last fall. Arbitrator Craig Overton sided with the union, Local 307 of the International Brotherhood of Police Officers. The town appealed to Superior Court and Judge Jeffrey A. Lanphear has upheld Overton’s ruling.

In October, Overton determined that the town had wrongfully calculated Detective Raymond Pingitore’s pension based on 22 years of service rather than 23 years. He ordered the town to retroactively compensate Pingitore for the difference between the two salaries.

Edward Achorn: The master lever could ‘send a message’ in R.I. this year

It has long been an axiom of war that there is much to be gained in seizing an adversary’s guns, and turning them on the enemy. The slaughter that follows can be devastating.

If a creative thought ever entered the brains of the Republicans in Rhode Island, they might take that lesson of war to heart — and use the state’s corrupt master lever against the party in power. More on that below.

The Democrats who control the General Assembly continue to defy the public interest and block the oft-stated desire of their constituents for reform by keeping in place a legacy of 19th Century machine politics — the master lever, which permits a voter, through one mark on the ballot, to vote for every member of a party, no matter how good or bad, in every race. While the system has little effect near the top of the ticket, it tends to prop up lesser-known hacks and ne’er-do-wells further down the ballot who would otherwise lose, since some people utterly ignorant of the candidates would not otherwise vote in these low-profile races.

Brenda Bedrick: R.I. taxes not so hot

Do you know what was so interesting about the Feb. 7 article “These days Americans no longer on the move”?

Every other New England state lost households to warmer climates but not Rhode Island. We lost households to Massachusetts. People moved over the border to avoid taxes.

William Kenney: Gist’s whip hand

One can only hope that when state Education Commissioner Deborah Gist is done whipping the school teachers into shape that she will run for a position where she can do the same with our General Assembly.

William Kenney Foster