Category Archives: PERS

Salter: Legislature must deal with PERS


Revenue for the PERS system comes from three primary sources – investment income, employer contributions (paid by the taxpayers) and employee contributions (deducted from the pay of state employees participating in the PERS plans).

Former Gov. Haley Barbour appointed a 12-member study commission to evaluate PERS and recommend improvements that would streamline its organization and funding mechanisms. That action came in the wake of 2010 changes to the system by the Legislature that saw employee contributions raised from 7.25 percent to 9 percent, retirement eligibility was increased from 25 to 30 years for individuals hired on or after July 1, 2011, and the overall benefit formula was reduced for individuals hired on or after July 1, 2011.

Pension reform is a growing national issue and Mississippi is not immune to the problems inherent in public pension systems. In 2011, state lawmakers backed away from the issue during an election year.

As in Ohio and California, the partisan divide has little to do with the pension reform issue. Pension reform isn’t a political problem, it’s a math problem. The long recession with low rates of return on investments have combined with the rush of Baby Boomers to retirement age create a problems exacerbated in Mississippi by the fact that past legislatures raised state employee retirement benefits without providing a funding mechanism while simultaneously failing to set aside funds sufficient to meet future retiree health care benefits.

DJ

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Filed under Democrats, Entitlements, Ethics, Legislature, Mississippi, Mississippi State House, Mississippi State Senate, Opinion, PERS, Politics, Public Service, Republican, Retirement, Revenue, Spending, State Government, Superintendents, Teachers

Pender: Unattributed PERS white paper circulating around State Capitol


One highlight of the new white paper is that PERS’ 10-year average investment return is 5.4 percent, while its operating “assumption” is 8 percent.

This is akin to someone assuming their salary will be $40,000 a year as he spends money, when it’s really $30,000.

It also states that, under a new standard, PERS is only 53.5 percent funded, compared to the national state average of 77 percent.

Something, eventually, has to give – either benefits drastically cut or taxpayers hit hard.

“The question is, is there the political will to address it?” said Lt. Gov. Tate Reeves, one of the few legislative leaders I could get last week to discuss the program that dares not speak its name.

CL

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Filed under Entitlements, Legislature, Mississippi, Mississippi State House, Mississippi State Senate, Opinion, PERS, Politics, Republican, Retirement, SLRP, Spending, State Government, Tate Reeves

State Bond Showdown: The Conservative Reconstruction of Tate Reeves


BY: B. Keith Plunkett @Keithplunkett

In April, with the 2012 legislative session coming to a close, drama was unfolding in the halls of the Mississippi State Capitol. Drama in the final days of a session is not an unusual occurrence, and certainly not with both ends of the building falling under Republican rule for the first time in 150 years. However, in this particular instance lawmakers were hurriedly attempting to put together a bond package to help fund improvements, particularly at Mississippi’s universities, and the deadline was getting tight.

The House of Representatives had accomplished it’s work on the package in February on HB 1631 and had sent it over to the senate for review. In a typical scenario, the senate would follow suit and send over a package to the house. Differences would then be ironed out in conference by the chairman of Ways and Means in the house, and the chairman of Finance from the senate, along with two conferees appointed by each. The package would then be built anew from the ground up. This dance has been performed unchanged for decades.

This year, however, was different.

Senate Finance Chairman Joey Fillingane refused to meet with his counterpart in the house, Representative Jeff Smith, reportedly at the instruction of Lt. Governor Tate Reeves. Reeves instead opted to call a meeting with House Speaker Philip Gunn and the two chairman just 24 hours before the deadline to try to hammer out a take-it-or-leave-it deal. The meeting adjourned with no deal.

Two hours before the deadline, Reeves told Speaker Gunn there would be no further discussion involving the two chairman. This would instead now be between the leaders of the two bodies only. With the clock running out on Mississippi universities, the two newest of the GOP leadership watched the deadline slip past.

The initial cost in that house version of the bond bill for colleges that was left on the table was $104 million over 4 years.

The cost now being floated by IHL to the legislature? $684 million.

So what’s changed? Trust.

Once able to work closely together to determine need versus indebtedness and come up with a number that still got the job done, the college board has been forced to resort to throwing the problem at the feet of the legislature and, in essence saying, “Okay, then you fix it!”

But, taxpayers may find there is something even more disturbing going on here than simple irresponsibility and a disregard for a quickly depreciating and crumbling infrastructure at Mississippi universities–a fact that alone will likely cost more in the long-run than if the problem were addressed sooner.

A look at the past record indicates what may be happening is the reconstruction of Tate Reeves image for future aspirations, at the expense of long-term savings for Mississippi taxpayers. At a time when the long-term costs of investment–maybe more appropriately described as non-investment–will be socking it to Mississippi taxpayers, Reeves would be long gone, on to bigger and better things. This is much akin to what occurred with PERS risky investments, another board Reeves sat on as treasurer. That debacle ended with Mississippi having to sue firms in order to get a smaller piece of state retiree’s money back after investing in risky mortgage schemes.

Reeves aspirations for higher office is no secret. But in order to get there, there have to be a few bona fides, either real or contrived. Building a conservative candidate narrative is tougher when the pattern and the particular don’t match up.

The particular instances we’re currently being spoon-fed by the Lt. Governor is a “tough on government waste” narrative. It’s not indicative, however, of the pattern.

As Treasurer, Reeves oversaw the issuing of nearly $3.5 billion in bonds over the span of 7 years, that’s half a billion a year in state issued bonds. Yes, billion . . . with a “B”. That’s twice the amount that was in HB 1631 multiplied by seven. It’s hard to wipe that big spending slate clean without some drastic measures, like say, a wild swing in the other direction.

The firms that managed the investment of those bonds was at the discretion of the Reeves’ run Treasury Department, allowing for contracts to be awarded to money managers represented by marketing managers. Marketing managers are known for giving out campaign cash like candy from a bank teller, and at least two marketing managers that gave sizable sums of money to Reeves have been linked to pay-to-play scandals and indictments in other states. That tidbit doesn’t exactly fit the “tough on government waste” narrative we’ve been hearing, does it?

If the position to issue no bonds is, as Reeves says, about having a “conservative borrowing plan for only the most essential needs”, then one might ask what he defines as “essential”? Why is it that Reeves needed a personal driver at taxpayer expense in a state-owned vehicle for the entire time he was in the Treasurer’s office? Is that “essential”?

How does that compare to the “essential” need of renovating the only science building at Delta State University, or the library at Mississippi University for Women that is virtually the same as it was in 1969? Is it more essential than safe bridges and roads?

Reasonable people can debate the assessment of need in the College Board’s list. But, it’s difficult to describe the need of universities as secondary to that of a $26 million Civil Rights Museum. One of Reeves last acts as treasurer was to agree to fund Haley Barbour’s call for a Civil Rights Museum by issuing state bonds. This was, of course, right after Barbour stuck his foot in his mouth over the subject of race relations, and his aspirations for a Presidential run were suffocating. That was just a year ago. One wonders if Reeves believes such spending to be more “essential” than funding the college facilities that will educate Mississippi’s next generation.

One might also ask, “what borrowing plan is Reeves referring to?” If he has one, then the college board doesn’t know about it. That’s why they are having to ask the legislature to come up with one. Furthermore, if such a plan does exist and is simply hidden away then taxpayers need to see it to know if it relies on questionable returns.

I am not in favor of big government spending. Most conservatives aren’t. But, I’m guessing that most conservatives are in favor of responsible, transparent, long-term investment that creates a greater return at a lower cost to taxpayers. Why on earth would we allow a bad problem to get worse when it will cost us much, much more in the long run? What the hell is so conservative about that?

As a finance guy–albeit for a short while before riding Haley Barbour’s coattails into the Treasurer’s office–Reeves surely would have understood the need for investment in depreciating assets to maintain viability for long-term savings. The problem is, that message doesn’t play nearly as well as the simplistic chest thumping message of “standing up to state debt”.

And what about the additional debt to the state? The house under Speaker Gunn’s leadership was prepared to authorize only as much new spending as the state had paid off, a tactic for funding state improvements that was a staple of former Governor Barbour’s repertoire. It was also a tactic that Treasurer Reeves signed off on whenever Barbour wanted for 7 years. That sounds like responsible conservative fiscal management to me, and Speaker Gunn should be commended for it.

Taxpayers, state officials, county officials and college board members dealing with this issue need to consider that maybe this fly-by-the-seat-of-the-pants approach isn’t about conservative fiscal management or planning. Maybe it is neither long-term investment, nor the “essential needs” of Mississippi that’s the real reason there is no plan.

Evidence suggests it might very well be ambition, and a political need to clean up a not so conservative record on government waste, and a not so transparent record of awarding government contracts.

About Keith: Keith Plunkett has worked on communications issues with a range of public officials from aldermen to Congressmen, and a variety of businesses, governmental agencies and non-profits. He serves or has served as a board member of several non-profit, civic and political organizations. Contact him by going to HorizonMediaMarketing.com or follow him on Twitter @Keithplunkett

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Filed under Budget, contributor, Education, Ethics, Haley Barbour, Keith Plunkett, Legislature, Mississippi, Mississippi State House, Mississippi State Senate, Opinion, PERS, Philip Gunn, Politics, Republican, Retirement, Revenue, Spending, State Bonds, State Government, Tate Reeves, Treasurer

Mitchell: Mississippian’s don’t take advantage of public information


Complaining about too little access to public information has been a lifelong pursuit for me. Still, I think a “D+” grade assigned to Mississippi by a national group is too low.

This state has plenty of good laws, plenty of verbal support for transparency at the highest levels of state government. The train jumps the track in a couple of areas, including enforcement and, frankly, interest by journalists and the public.

Take campaign finance records as one example.

For as long as there has been an Internet, Mississippi secretaries of state have placed the donation and spending reports of every candidate for every office online for anyone, anywhere to see.

There’s plenty of room to improve the reports themselves and how they can be found and searched. There’s no excuse for not making the improvements. But the reports are open to public view.

Yet how many local papers write stories about where candidates are getting their campaign funds? Not many. No local TV crew mines this type of information.

Much the same is true for the website seethespending.org. It’s a fairly new site operated by the Mississippi Center for Public Policy. It offers a wealth of information. Wonder how much your county spent on cell phones? (Grenada County spent $14,071.89 with AT&T Mobility in 2010.) The information is there, usually easy to locate.

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Mississippi Trial Lawyer advocates taxing internet purchases to participate in ObamaCare Medicaid expansion, shore up PERS system.


BY: B. Keith Plunkett

Philip Thomas, a Jackson trial lawyer, advocates raising taxes in Mississippi to pay for ObamaCare’s Medicaid expansion. He also would use the money to help solve the financial problems of the Public Employee Retirement System.

He writes of ObamaCare expansion:

Gov. Phil Bryant and other Mississippi Republican leaders oppose accepting the Medicaid expansion in the Affordable Care Act because the State can’t afford it. The expansion would provide healthcare coverage to an additional 250,000–400,000 Mississippians. That’s on top of the 600,000 Mississippians covered by the program now.

The federal government will pick up 100% of the costs at first, and 90% of the costs after 3 years. Mississippi’s 10% share would be $160 million per year. In return for the $160 million, hundreds of thousands of Mississippians would receive healthcare.

In addition, billions of federal dollars would enter the state’s economy to pay for that health care. And this money would not benefit the economy of just a few areas the way casinos and auto manufacturing plants have. There are hospitals and nursing homes in every community that would have more money to pay employees if Medicaid expands. This sounds like a great investment to me, if Mississippi can figure out how to pay for it.

After spending $160 million of the estimated $303 million in revenue generated from raising taxes on internet purchases, Thomas says he would spend the rest of the money on the PERS system:

Mississippi should use whatever is needed from the rest of internet sales tax collections to fix the State’s Public Employees’ Retirement System (PERS) when it blows up. And it’s going to blow up.

In an article back in October 2011 over proposals in the state legislature by Republican Representatives Mark Formby and Jessica Upshaw to study an internet sales tax, I wrote this:

If brick and mortar shops want to compete with internet sales then they need to move with the market. Not try to have legislators hold back the progress of others so that they can compete.

Of course, Thomas isn’t advocating legislating fairness to businesses who don’t move with the times. He’s advocating sucker punching Mississippi’s consumers in order to pay for more big government and entitlement spending. Either way, it’s meddlesome government engineering and should be rejected.

Whether Republican or Democrat, Trial lawyer or business person, raising taxes on consumers or businesses is regressive, and it’s bad policy.

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Crawford: Ho hum, PERS costs jump again


Ho hum … 14.26 percent is now the public employer “contribution” rate to the Mississippi retirement system (PERS). Cities, counties, schools, colleges and universities along with state agencies are required to contribute this percentage of payroll to support PERS.

Yawn … the rate went up July 1 from 12.93 percent last year. That was up from 12 percent the year before, which was up from 11.85 percent, which increased from 11.30 percent, which rose from 10.75 percent, which jumped up from the steady rate of 9.75 percent in place from 1990 to 2005.

La de da … these required contribution increases, authorized by the Legislature, allow PERS, in effect, to pass its deficits on to taxpayers.

Oh well … a PERS newsletter to public employers says they should “be aware that the actuary has projected the need for an additional increase next year.”

via Ho hum, PERS costs jump again | The Greenville News | GreenvilleOnline.com.

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Lawmakers additional retirement payout and its future


Once a lawmaker is vested in state government, they get perks like no other state employee. With a base pay about $10,000, their retirement packages go far beyond that.

Through the Supplemental Legislative Retirement Plan, known as SLRP, legislators are the only public employees who get an additional 50% more in retirement simply because they are legislators.

“For legislators to add 50% on to that for themselves, most people see as very wrong,” said Mississippi Center for Public Policy President, Forest Thigpen.

Thigpen says the payout is often a hot button issue since it’s calculated on a lawmakers highest four salary years while in office and includes per diem payments.

“The result is that it’s not uncommon for 40, 50, $60,000 to be the base on which their retirement is calculated,” said Thigpen.

It was established by lawmakers back in 1989 and ever since then the plan hasn’t changed much. Currently there’s a total of 381 active members enrolled in SLRP, including current lawmakers as well as those already retired and their beneficiaries.

For fiscal year 2011, SLRP paid out $823,936 in benefits to 147 members or beneficiaries currently receiving them.  As a whole, the Public Employees Retirement System, known as PERS, paid out more than $1.6 billion to more than 83,000 people.

via Lawmakers additional retirement payout and its future – WLBT 3 – Jackson, MS:.

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