Gubernatorial Results for Pensions

As a followup to the last blog about states where public pensions are something of an issue in the election for governor, here is how it turned out:

Oregon

  • 50%-Incumbent Democratic Gov. Kate Brown: Borrow, sell assets, task force, study due September 30, 2019.
  • 44%-Republican state Rep. Knute Buehler: Freeze and protect accruals with everyone going into a 401(k)-type plan with an unspecified “reasonable match”

Colorado

  • 52%-Democratic U.S. Rep. Jared Polis: would “reject efforts to reform PERA on the backs of our teaching professionals and state or local employees in the future.”
  • 45%-Republican Treasurer Walker Stapleton: proposing allowing all employees to choose a 401(k)-style plan, raising the retirement age and reducing funding rate to 5% from 7.25%.

New Mexico

  • 57%-Democrat U.S. Rep. Michelle Lujan Grisham
  • 43%-Republican U.S. Rep. Steve Pearce: “Employees many years away from retirement are going to have to see significant changes.”

Massachusetts

  • 33%-Democrat Jay Gonzalez: plan to tax endowments
  • 67%-Popular incumbent Republican Gov. Charles D. Baker

Rhode Island

  • 52%-Democrat incumbent Gov. Gina Raimondo
  • 39%-Republican Alan Fung
  • 4%-Independent Joseph Trillo: campaigning on the promise of giving back part of the 3% COLA cut to retirees, and threatening to appoint a special counsel to investigate what he calls “high-risk” alternative investments made by the pension fund during Ms. Raimondo’s tenure as treasurer.

Illinois

  • 54%-Democrat J.B. Pritzker: has not released a detailed plan to tackle the state’s pension issue, is leading Mr. Rauner in the polls.
  • 39%-Incumbent Republican Gov. Bruce Rauner
  • 2%-Libertarian Grayson “Kash” Jackson
  • 4%-third-party candidate State Sen. Sam McCann

Connecticut

  • 48%-Democrat Ned Lamont
  • 47%-Republican Bob Stefanowski

Iowa

  • 47%-Democrat Fred Hubbell
  • 50%-Republican incumbent Kim Reynolds

Pennsylvania

  • 58%-Democratic Gov. Tom Wolf
  • 41%-Republican, fellow York County millionaire Scott Wagner

 

11 responses to this post.

  1. California
    Gavin Newsom….Dem…59.5%
    John Cox…………..Rep. …40.5%

    If you thought Jerry Brown was bad (I didn’t, he was the adult in the room, on pensions), hold on to your hats. Newsom is your worst nightmare… an extreme liberal. ..

    With a mandate.

    Reply

  2. Jerry Brown wants to settle the “California Rule” lawsuit in 2018… to give cities the ability to reduce pensions.

    Newsom “strongly believes changes in pension systems should be done with input and buy-in from workers and those who represent them — not something that is done unilaterally,” his spokesman Nathan Click said.

    CalPERS has a lot of money. .. they are paying out over $20B a year, but they have $350B (perhaps, LOL) in assets.

    Trouble is ARCs are increasing rapidly. That’s a good thing, actuarially, but bad for city budgets. If any city cant, or won’t, come up with the annual contribution, CalPERS could cut them off (see Loyalton, CA) and pay the remaining retirees 40 cents on the dollar.

    Probably not a damn thing Newsom could do to stop them.

    Reply

    • Posted by skip3house on November 7, 2018 at 10:22 am

      Eventually, ‘gravity’ rules

      Reply

    • Posted by El Gaupo on November 7, 2018 at 3:05 pm

      I beleive in Loyalton, a very small town that always received grants to pay its bills, withdrew from Calpers, because their last employee eligible for a pension retired and they felt that their obligations were complete because they had no actives left. State felt otherwise and keeps billing them. My guess is they stop w the state aid there in the amount t owed.

      Reply

      • As I recall, there was an unfunded liability of “x” dollars, Which Loyalton was willing to pay, lump sum. But that was discounted at 7.5%. When they closed the system, CalPERS discounted the liability at about 3% (for closed systems.) That was too much to swallow.

        As was pointed out in the Stockton bankruptcy, a pension consists of 3 contracts.

        One between the city and it’s employees.
        One between the city and CalPERS, to act as agent for investing and paying out pensions.
        One between CalPERS and the retiree.

        The one between the city and CalPERS was broken when contributions stopped.
        The one between CalPERS and retiree still exists, but is modified by 60% reduction.
        The one between the city and it’s employees was/is still legal and binding.

        Good news is, last I heard, CalPERS is paying each retiree about 40 cents on the dollar, and the city is making up the remaining 60 cents out of general revenues.

        Butt…

        This is a small town, with few retirees. If something similar happens in a larger city (or county) with similar CalPERS reductions, then 60 percent of the pensions would be “pay-as-you-go” from the city general fund. What if this happens when a mid sized city is unable to come up with the ever-increasing ARCs?

        Reply

        • Posted by Stanley on November 7, 2018 at 7:16 pm

          “…the city is making up the remaining 60 cents out of general revenues.”

          Are you sure about that? The article in the LA Times led to the conclusion that paying the diff about $6K per month (for four pensioners) was beyond the capability of the little town of Loyalton.

          Retirees far and wide should get used to the idea that the big whack is on the way. Patsy went from $48K per year to about $18K. This is what happens when Ponzi schemes grow into old age–they whither away. Get it Steve? Our socialist benefits are whithering away.

          Reply

        • Posted by Stephen Douglas on November 7, 2018 at 10:12 pm

          Not sure at all. I can’t find anything more recent than Jan. 2018.

          The city had agreed to pay the difference up to the end of 2017, not sure what happened after that. According to Wikipedia, the city was paying “only” $30,000 a year to CalPERS before the termination fiasco, now paying much more.

          Can they afford it? Est. population in 2016 was under 700, 150 under the age of 18. Only one city employee now.
          Total city expenditures in 2012 of $1.2 million. Only $163,000 of that came from local taxes. The rest was from federal and county grants. Can they afford to continue paying “pensions” of $70 some thousand a year, without selling assets? IDK Do they have any assets to sell? IDK
          One suggested option was disincorporating and being absorbed by the county. Would the county then assume the pension obligation?

          This is just a precursor, in miniature. What happens if Bakersfield (population 380,000) can’t come up with their contribution next year, or the year after?

          It looks like it’s a race between Illinois, New Jersey, or California cities, which will be first to actually cut payments.

          Reply

          • Posted by skip3house on November 7, 2018 at 11:57 pm

            Just heard NJ pays ~$4Billion yearly for debt service, not including half Billion just voted.

          • Posted by Tough Love on November 8, 2018 at 12:23 am

            Skip3house,

            Hard to believe NJ’s voters didn’t see that $500M School bond issue from what is was and WASN’T.

            Bonding should ONLY be used for MAJOR (VERY long-lasting) Capital Improvements, like a brand new school building. The wording in the Bond-Issue was far to vague as to what share (IF ANY) would have met that NORMAL standard.

            I saw it a way to get ADDITIONAL funds for the schools w/o raising school taxes (if at all possible because of the 2%-annual-increase cap). MOST, if not all of the items that will be covered by the Bond should be included in annual Operating Expenses, where the funds come from the school portion of our Property Taxes.

            The Taxpayers were hoodwinked ……. bigtime.

          • Posted by El Gaupo on November 8, 2018 at 11:58 am

            TL. You are correct but you could see this coming. I also voted against the $500M school bond. Simply because it will really be money dumped into urban areas and the suburbs wouldn’t get much. Maybe, this, like the super cap reversal, is the state realizing that education needs to be funded and the 2% was beginning to damage that. You know what, putting out to a vote to decide whether we should put in a new school furnace to replace the 50 year old on the blink, or to repair a leaking roof is sooooo stupid. Prove you need the repair, get 3 estimates and than do it. Borrow and raise taxes if bed be. I was at a recent board of Ed meeting where a man stood up and said “let the kids wear their coats in school and don’t fix nuthin”. Yea, OK. That ain’t gonna fly with the folks raising kids in the town. Wouldn’t have flown when that a fellow had his kids in school.

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