Better, Faster, Cheaper

Public Pensions’ Not-So-Rosy Outlook

A new study finds that state and local pension funding has stabilized in the last year. But the news is never all good when it comes to public employees' pensions, and another report released this spring suggests that big problems may lie ahead.

In the latest study, from the Center for State and Local Government Excellence, Alicia Munnell and Jean-Pierre Aubry looked at 160 large systems that cover 90 percent of state and local government pension-plan members nationwide. They found that, in the aggregate, the plans had 74 percent of the money that was needed to fund their liabilities in 2015, up from 73 percent the year before. To provide context, the systems were 86 percent funded in 2007, before the Great Recession, and they were 103 percent funded in 2000, at the peak of the longest bull market in history. READ MORE

The Billions We're Wasting in Our Jails

Few areas of local government spending present better opportunities for dramatic savings than those that surround pretrial detention. Cities and counties are wasting more than $3 billion a year, and often inducing crime and job loss, by holding the wrong people while they await trial. The problem: Only 10 percent of jurisdictions use risk data analytics when deciding which defendants should be detained.

As a result, dangerous people are out in our communities, while many who could be safely in the community are behind bars. Vast numbers of people accused of petty offenses spend their pretrial detention time jailed alongside hardened convicts, learning from them how to be better criminals. READ MORE

Sick-Leave Payouts: the Taxpayers’ Headache

The aftershocks are still being felt in Massachusetts from the case of a state university president who received a payout for unused sick and vacation time of nearly $270,000 upon his retirement last year -- in addition to an annual pension of more than $183,000 and a $100,000 consulting gig. Proposed fixes are taking shape that, though imperfect, are steps in the right direction.

The problem is very real for many state and local governments. In Massachusetts alone, as of last year taxpayers faced about $500 million in liability for unused sick and vacation time. READ MORE

A Model for Closing the Digital Divide?

In my previous work with an international trade association, my job was focused on closing the gender digital divide in mobile phone and internet access in the developing world. I saw first-hand the dramatic impact the internet can have in empowering people to learn new skills and get access to information to improve their lives. I worked with women across Asia and Africa who used mobile banking to save money and invest their savings in their children, utilized YouTube to learn new skills such as sewing to increase their earnings, and used mobile apps to access health information or health care when pregnant. Access to the internet literally changed their lives.

Now, as the chief innovation officer for San José, Calif., the largest city in Silicon Valley, I have the privilege of working in a global hub of innovation and technological creativity. But despite the starkly different setting, I've found that many of the same lessons apply. READ MORE

States and the Ever-Deepening Fiscal Hole

Two years ago, I wrote about a fascinating study of state indebtedness published by J.P. Morgan. New rules from the Government Accounting Standards Board that standardize the reporting of liabilities have provided an opportunity to update the report, and the results should be required reading for state officials.

In "The ARC and the Covenants 2.0" (ARC refers to "annual required contribution"), author Michael Cembalest again shows how much each state spends on pension contributions for public workers, other post-employment benefits (OPEB) such as health insurance, and bonds as a percentage of state revenues, and what each state would have to spend to amortize the liability over 30 years assuming a 6 percent return on assets. Pensions and OPEB account for between $1 trillion and $1.5 trillion in overall state liabilities, while bonded indebtedness is about $500 billion. READ MORE

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