Finance & Revenue

Where: Iowa

Which pensions: Iowa state employee pension & the Des Moines Teacher Pension

Why? Currently teachers in the Des Moines teacher fund cannot transfer their service credit among state pension funds

Details about the 2 pensions:

• Iowa state pension fund is 83% funded
• Des Menoines teacher fund is 100% funded

What benefit to the ISD teacher fund? The 448 from the Des Moines Tacher Fund would be fully funded

The 3 approvals necessary:

• the legislature has to change laws to allow for the merger
• the 2 pension systems have to agree

The Des Moines Register | IPERS mulls $66 million pension merger with Des Moines teachers

The state: Massachusettes

What type of bill created a special commission on fantasy sports? An economic development bill

What’s the deal with this special commission?

• All in the Name: Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports
• Jurisdiction:  regulation of online gaming, fantasy sports gaming and daily fantasy sports, including “economic development, consumer protection, taxation, legal and regulatory structures, implications for existing gaming, burdens and benefits to the commonwealth and any other factors the commission deems relevant.”
  • Specifically excluded from review: the lottery and online lottery
• Membership: 
  • Co-chair by a Sen. & a Rep.
  • Gaming Commission appointee (its Chairman)
  • Senate President appointee
  • House Minority Leader appointee
  • Attorney General appointee
  • appointtees by the Governor, the House Speaker and Senate Minority Leader 

South Coast Today | Experts joining state lawmakers to study online gaming

Sunset Commission has the available ERS decision materials with modifications.

What do I need to know?

• NEW ISSUE. Senator Taylor wants to make sure there is a way to get otherwise confidential retiree information. Currently the information is protected from disclosure.
• MODIFICATION. Chairman Flynn wants to address alternative investment recommendation by:
  • “directing ERS to report the final actual amounts of profit shared for each alternative investment at the conclusion of the investment and
  • direct ERS to make all profit-sharing information readily available on its website “
     
• NEW ISSUE. Sen. Taylor wants 2 taxypaer representatives on the ERS board.
• NEW ISSUE. Chairman FLynn wants to require the Gov. appointee to the ERS baord to be an active retiree with a background in health insurance, employee benefits, investments or a related field
• NEW ISSUE. Sen. Schwertner wants ERS to adjust actuarial assumptions every 4 years instead of every 5 years
• NEW ISSUE. Sen. Schwertner wants ERS Board to approve every investment over $100 million
• NEW ISSUE. Sen. Schwertner wants ERS 2017 audit to include best practices in inesment decision making, including:
  • the composition of its internal investment committees,
  • investment authority,
  • veto authority, and
  • board oversight and use of the Investment Advisory Committee. 

In a surprise to no one, Texas school fiannce system is potentially facing conflicting court rulings, attorney general opinions, school district actions, and TEA commisioner related statutes. 

Its a field of dreams for education law attorneys. 

Commissioner Morath wants the Attorney General to answer these questions:

• Must the Commissioner of Education, in computing state funding for school districts receiving ASATR, recognize and use LOHE that, under the analysis in A.G. Op. No. KP-0072 (2016), were not authorized to be adopted?
• Alternatively, in light of A.G. Op. No. KP-0072 (2016), must the commissioner disregard a local change to the homestead exemption for the purposes of determining ASATR even if the change has not been nullified through an administrative or judicial process?
• Does the answer change if the school district modifications to the local option homestead occur prior to or after the approval of the constitutional amendment by voters on November 3, 2015?
• If a court determines that the law prohibiting the modification of the LOHE meets constitutional muster but the court only provides prospective relief, must the commissioner withhold the funds to the district or does the commissioner’s duty to make the adjustment apply regardless of whether the underlying action was done illegally? 

TEA Commissioner Morath Attorney General Opinion Request KP-0137-KP

Which state: Alaska

Who wanted pension obligation bonds in Alaska? Governor Bill Walker intended to have the state offer bonds for sale to cover a multibillion dollar budget deficit in Alaska

Who stopped the Governor from proceeding? The Alaska Senate Finance Committee

What argument did the Senate Finance Committee offer to stop the sale of pension bonds? 

• Senate Finance members objected to the state taking on more debt
• + 
• S&P Global Ratings warned that Alaska credit rating  would be downgraded

Reuters | Alaska governor halts sale of pension obligation bonds

Take aways:

• Texas Public Policy Foundation’s says it is unfortunate that Houston City Council voted to  approve the Mayor’s Pension Reform Plan
• TPPF says it is unfortunate for 2 reasons:
  • the reform “does nothing for local control”
  • the vote shows that city council members “are not serious about making needed structural changes [to the pension systems]”

TPPF Statement on Houston City Council Endorsement of Pension Reform

The Dallas Police and Fire Pension Board has approved these pension reforms:

• Dallas will contribute $1 billion
• Increase contribution rates for police and fire personnel who are not in DROP plans from 8.5% to 9.0%
• Increase contributions of active police officers and firefighters who are in DROP would rise from 4 percent to 9 percent
• Dallas will increase its contribution  from 27.5% to 28.8%, highest allowed by statute
• Cost of Living Adjustments drop significantly

What’s required to move the reform forward?

• 65% of plice and fire fighters must approve the deal
• The reforms cover 55% of the funding shortfall, the remainder will be covered by taxpayers
  • Most likely funding source: a bond proposal

WFAA | Dallas Police and Fire Pension Board approve plan to help failing retirement fund

How did fantasy sports regulations begin moving in New York? A letter from constituent in Queens.

Was this consituent actively interested in government before this? No. In his words, “I’ll be completely honest with you — never,”

How did this gy who had no interest in govenment get connected with his legislator? Fantasy sports operators had proactively encouraged he visit a website, FantasySportsForAll.com

What was the legal environment in New York? The Attorney General had actively pursued comapnies as operating illegal gaming operations

What did the strategic plan include? Advertising and “a mix of tech-savvy guerrilla campaigning and good old fashioned celebrity hand-shaking”

New York Post | Meet the man who saved fantasy sports in New York

Texas Public Policy Foundation put out an October 2016 Policy Perspective entitled, “Pension Cost Burdens on Texas Cities and Counties “

The word “burden” should be our tipoff that this isn’t going to be rosy glasses, unicorns and butterflies. Leave happy-go-lucky to recharge and let’s go find the kernels of info:

TPPF cost burden analysis take aways:

• Pensions eat up a lot of local money. 
• More costs, the more the risk for taxpayers & beneficiaries
• Defined Benefit System is like the boyfriend who over-promises and over-delivers, but instead of thinking you hit the boyfriend jackpot, TPPF wants you to dump him.
• Multi-employer plans are not as burdened as single employer plans, and by single employer plans, like Houston
• Texas local government pensions are doing better than other megastates, like California

TPPF Recommendations:

• Restoration of local control of state- governed pension plans
• Legislators should focus on fixing the single employer plans of the big cities, see recommendation #1, rinse and repeat
• Cities and counties should migrate to defined contribution systems.

Local issue du jour: plastic bag ban environmental fee in Brownsville

The intervention by the Attorney General: Attorney General sued Brownsville alleging the environmental fee imposed on plastic bags amounts to a sales tax

What’s the thought process?

• The city says it has the ability to do what it needs to keep the city clean
• The Attorney General says that managing waste has to be managed by taxes already collected not from assessing taxes or fees at the cash register.  

Brownsville Herald | Texas AG Paxton calls bag fee ‘an illegal sales tax’

The state pension fast becoming the envy ofother pensions: Nevada Public Employees’ Retirement System

What does the Nevada pension investment staff look like: 1 guy. Bare bones to the extreme.

Investment strategy: React to nothing. Do nothing. All investments are in low cost funds that mimic indexes. One outside consultant advises. 

Nevada‘s investment returns:  Better than CALPERS with exceptionally low costs

Other states making the move: CALPERS is severing ties to outside private investors, New York is reigning in outside investor use.

Why does this matter? Sunset is looking at ERS investment protocols.
 

Wall Street Journal | What Does Nevada’s $35 Billion Fund Manager Do All Day? Nothing

Goal of proposed property tax exemption: exempt the surviving spouse of any fallen Texas first responder from having to pay future property taxes on their homestead

Modeled after: Current exemption for combat veterans who were killed in the line of duty

Lt. Gov. Press Conference

California Proposition 54 has a target- the Legislature. Specifically, amendments.

What does Prop. 54 do?

• The public must  have online access to everything the legislature votes on 72 hours in advance.
• Target is the final vote on a bill.
  • A republican Assemblyman supporting the measure wants to get to those amendments that pass bills that weren’t before the chamber.

The opposition: Democratic Party and Labor

The supporters: League of Women Voters of California, California Common Cause, Howard Jarvis Taxpayers Association, California Taxpayers Association, California Chamber of Commerce, Latin Business Association, League of California Cities, California Planning and Conservation League

The Sun | Increase Legislature’s transparency by passing Prop. 54: Jay Obernolte

Yes on Prop 54

No on Prop 54

New York Times | California Today: Combating the Legislature’s ‘Sausage Making Behind Closed Doors’

• Hotel Tax Increase approved to fund $750 M of the stadium
  • Raises Las Vegas hotel tax up 1.4% from its current 12%
• $650 M from Sheldon Adelson
• $500 M from the Raiders
• $420 M for reonvating a dated convention center in Las Vegas
• The economic impact is estimated at: 451,000 new visitors and an additional $620 M

ESPN | Nevada Legislature approves plan to build NFL stadium in Las Vegas

The Democrat County Judge: Bexar County Judge Nelson Wolff

The Judge’s reasoning:

• The swap cuts off the arguments about rising property tax bills
• The agremeement came in response to TPPF proposal of a 10.98 percent universal tax on sales and services
• As an alternative, fund schools through a sales tax and cut half the property taxes

Watchdog.org Texas | Top Democrat supports scrapping property tax for sales tax

The company:  Wrapify app

The sharing economy angle: Drivers who are willing, have their cars wrapped in mobile advertising.

The potential revenue source: The mobile ad, its like a billboard that can drive to targeted locations.

The data issue:  The wrapped cars collect data that is sold. The data ranges from the traffic to the type of road and time of day. 

CCTV America | New startup turns cars into moving billboards

• Gross receipet taxes lack economic efficiency
• Gross receipt taxes treat firms differently based on their structure
• Gross receipt taxes are problematically nontransparent
• Gross receipt taxes shift taxes onto consumers

Tax Foundation | Gross Receipts Taxes: Theory and Recent Evidence

The problems with Texas Rainy Day Fund according to TPPF:

• too easily raided for too many purposes
• too easily raided by a low vote threshold
• the cap is too high, money should be the taxpayers

The solutions:

• Require a 4/5 vote to use Rainy Day Funds
• Create a single maximum limit cap of 7% “of certain biennial general revenue (GR)-related funds”
• Use the funds above the cap to return to tax payers via a Sales Tax Reduction Fund or pay down state liabilities

The kicker for the solutions: They all require 2/3 vote of each chamber as constitutional amendments.

TPPF | Leaky Umbrella: The Need to Reform Texas’ Rainy Day Fund 

Oregon’s unfunded state pension liabilities are $22 billion. The people responsible for managing the Oregon pension system made this recommendation:

• Issue $20 billion in pension obligation bonds to help Oregon pay down its debt

What are the numbers behind Oregon’s pension system?

• 7.5% current rate of return
• $69 billion in assets
• $5500 pension liability per capita
• $0 cuts for existing pension contributors per the Oregon Supreme Court 

Statesman Journal | Pension managers to lawmakers: Reform PERS now

Economic Development Gold: Music Festivals

The numbers on music festivals via Trips Reddy of the Umbel consulting firm:

• 800 annual music festivals in the US
• 30 million attendees
• Top 5 festival combined ticket sales are: $200 million in 2016

The economic benefits of music festivals:

•  involve few fixed costs
• flexible venues
• flexible programming

The biggest cost of music festivals: security

Governing | For Economic Development Gold, Listen to the Music

New Jersey Legislature passed a 23 cent gas tax increase to fund transportation. 

What do I need to know about the 23 cent tax gas increase?

• Offset by other tax cuts ($16 billion or $1.4 billion depending who you ask)
  • elimination of the estate tax
  • cuts the sales from 7 cents to 6.625 cents
  • increased tax benefits for the working poor and veterans
• Also created a 4 member transportation project approval board consisting of:
  • Governor appointees
  • Senate President appointee
  • Speaker appointee

Asbury Park Press | Legislature OKs higher gas tax; heads to Christie

Why are Municipal Utility Districts getting the label unchecked? 

• “unlimited power” to raise taxes
• unlimited power to issue bonds
• no spending oversight

Total MUD debt? $60 billion

Houston Chronicle | MUDs sell bonds, levy taxes for developers who court conservative politicians with campaign cash

What calculation makes Dallas’ pension debt seems smaller than other cities? Overlapping debt analysis that considers the debt of pension systems in shared property tax bases

An example of overlapping debt analysis:

• Dallas unfunded liabilities at the end of 2015 were $1,371 per capita
• For the same time period, Denver had unfunded pension liabilities of $709 per capita
• Factor in overlapping taxing district unfunded liabilities, Dallas liabilities are $1,362 per capita
  • This adds in pension liabilities for the 20 overlapping taxing districts
• Factor in overlapping taxing district unfunded liabilities, Denver’s unfunded pension liabilities are $4,876 per capita
  • This adds in pension liabilities for 1 overlapping taxing district, the Denver Public Schools

Governing | A Better Way to Measure Pension Debt’s Danger

2 swing states could address fantasy sports this year:

• Ohio
  • S 356 makes fantasy sports legal only if no revenue is retained by the fantasy sports platform
• Pennsylvania
  • A court ruling threw gambling revenue into chaos making gaming legislation more likely this year

Legal Sports Report | These State Legislatures Could Still Tackle Daily Fantasy Sports This Year

The state: New York

The people opposed to the new fantasy sports regulation: 4 people, impacted by gambling disorders

What claims are alleged? That fantasy sports are a game of chance and thereby illegal gmaing under the state constitution

The proposed solution: Let the citizens of New York vote on it.

Bonjour! Constitutional Amendments for Fantasy Sports.

NY Post | New Yorkers want to block new fantasy sports gambling law

Anyone who is double dipping by receiving any government pension is not a safe hire in Burlington County New Jersey. Double Dutch enthusiasts breathe a sigh of relief that they’re safe.

Where:  Burlington County New Jersey

The pension prohibition: The County cannot hire anyone who is receiving an annuity under a tax payer funded pension

The exemptions: Current employees and military personnel

Governing | To Prevent Pension Abuse, County Bans ‘Double Dipping’

The 5 states considering leglaizing marijuana and imposing a tax:

• Arizona
  • 15% tax
  • tax to fund  health and education initiatives
  • creates the Department of Marijuana Licenses and Control
• California
  • 15% sales tax
  • cultivation tax of $9.25 per ounce for flowers and $2.75 per ounce for leaves sold in state-regulated retailers
  • Claims it will “reduce criminal justice costs by tens of millions of dollars annually.”
• Maine
  • 10% sales tax
  • Requires  municipal approval for vendors
• Massachusettes
  • state sales tax +  3.75% excise tax
• Nevada
  • 15% excise tax 
  • location restrictions on retailers like Alaska, Oregon and Washington and somehwat similar to TX alcohol free school zones

Governing | States Voting on Marijuana, Medical or Recreational, in November

The 7th largest pension: Texas’ own, TRS

The current alternative investment/hedge fund invesment: 8.3% of the $129 Billion Fund

The average rate of return for TRS by hedge funds? 2.7% over 3 years

Before official TRS action to cut hedge funds, these cuts are occuring:

• TRS staff has terminated some hedge funds
• TRS staff is moving for fee cuts

The Street | Texas Teachers May Be the Next Big Pension Plan to Snub Hedge Funds

The State: Pennsylvania

The 2015 E-Cig Tax: A 40% wholesale tax on e-cigarette goods

What happened before the 40% tax went into effect? Stores liquidated their goods and closed leaving the state without its revenue source

The revised proposal: Replace the wholesale tax with a 5cent per mL tax

PennLive | Vape tax takes effect as shops close, Legislature mulls rollback

The State: New Jersey

The pension board vote: To cut by 52% the investment in hedge funds

When did the board take this action? August 2016

Any mitigating facts in New Jersey? It wasn’t a bonus for the investment industry that one of the private investment firms that manage pension funds is being investigated for bribery 

Salt Lake Tribune | New Jersey pension pulls $190M from hedge fund

What’s a dark store appraisal? On 7th of September we talked about how Michigan and other states experienced large big box retailers reducing their property appraisals by comparing the store front to what an vacant store front would garner on the open market.

First came Dallas.  The Dallas Morning news the following week talked about dark stores.

Just in time for Halloween, the spooky dark store arrives in San Antonio. 

Let’s look at the Lowe’s plight in Bexar County:

The assessed value: $82/sq. foot

Lowe’s dark store retort: $20/sq. foot (the value of empty stores)

Bettencourt comments: 

• Dark store strategy is legal
• Texas doesn’t have legal protections against it
• Its comparable to the Valero vs. Gavleston County Appraisal District suit before the Texas Supreme Court

San Antonio Current | Big Box Chain Brings “Dark Store” Tax Dodge to San Antonio

• Ohio has a new fantasy sports bill
• Ohio’s Attorney General says fantasy sports isn’t legal and isn’t illegal – lawyers… its never a clear cut answer
• Ohio’s bill isn’t super industry friendly for these reasons:
  • It doesn’t call fantasy sports a game of skill or chance but rather a “scheme of chance”
  • 100% of entry fees have to go back to players

Ohio SB 356

Legal Sports Report | Ohio’s New Daily Fantasy Sports Bill, And Why Framing Matters At The State Level

• As of September 2016 LBB has reporting information on 22,600 contracts 
• In the last year the total value of contracts reported to LBB increased from $5.7 Billion to $82.6 Billion
• Latest and largest chunk of reported contracts comes from Institutions of Higher Education

LBB Contract Reporting and Oversight September 2016 

LBB Contracts Chart

The Comptroller has a new hotel tax data base that allows you to search by:

• Type of filer (montly or quarterly)
• Date
• Location
• City Limits restrictions

Texas Comptroller | Transparency | TEXAS HOTEL DATA SEARCH

San Diego in 2012 reduced its pension payouts. Labor groups sued. Pension cuts are caught in the courts.

The costs facing San Diego from the 2012 pension costs:

• Attorney fees for labor groups. No estimate of amount, but guesses are high.
• Cost of the pension cut payout: $100 Million  to $20 Million (people disagree)
• $20.1 million to retroactively create pensions for new hires, if the city is forced into this route

What’s the timeline for the 2012 cuts? An appeals court should rule in 2018.

Next stop: California Supreme Court. 

San Diego Union Tribune | Pension case could cost city millions

Which state’s governor cut university budgets by 2% mid-budget cycle? Kentucky

What was the Governor’s argument? Universities were part of the executive branch and he has broad discretion to cut executive branch budgets

What did the court say? Whatever power the Governor has to reduce budgets does not apply to univerisites. universities are indpendent, with distinct control over their budgets, with appropriations going directly to the university and not through the state treasury.

Governing |  Court: Kentucky Governor Lacks Authority to Cut Universities’ Funding

Never ever should investors buy pension obligation bonds because:

• the bonds will be downgraded at the end of the current credit cycle
• revenue bonds are a better choice for investment in the bond market
  • general obligation bonds suck your protfolio dry
• pensions are “grotesquely under water

Forbes | Why Investors Shouldn’t Buy Pension Obligation Muni Bonds

• Protecting consumer information
  • The volume of personal data collected includes:
    • credit card numbers
    • personal identifying information
    • Social Security Numbers
    • driver’s license number
• Preventing hacker manipulation of the fantasy sports platform
• The application of class action lawsuits to data breaches

Bloomberg | Fantasy Sports Must Tackle Cybersecurity Threats

Why? 2013 legislation created the committee . Government Code Section 316.091 et.seq.

Who serves on it? 5 Senators & 5 State Representatives

2016/17 Appointees:

• Sarah Davis (co-chair)
• Donna Howard
• Lyle Larson
• Drew Springer
• Armando Walle
• Paul Bettencourt
• Don Huffines

What the committee considers:

1) the history of fund balances;

(2) the history of transfers to the fund;

(3) estimated fund balances during that fiscal biennium;

(4) estimated transfers to the fund to occur during that fiscal biennium;

(5) information available to the committee regarding state highway congestion and funding demands; and

(6) any other information requested by the committee regarding the state’s financial condition.

What does the committee do?

• “adopt for the next state fiscal biennium a sufficient balance of the fund in an amount that the committee estimates will ensure an appropriate amount of revenue available in the fund”
• Pass a resolution stating such

Speaker Straus  | STRAUS NAMES APPOINTEES TO ESF COMMITTEE

Lt. Gov. | LT. GOVERNOR PATRICK ANNOUNCES APPOINTMENTS TO JOINT SELECT COMMITTEE

• Philadelphia
  • The buy-out: Buy out employees in the highest plans, and put the employees back into a plan that matches current employees
  • The net effect: Cuts $1 B of $6 B of pension liabilities
• Illinois
  • ​The buy out: Buy out employees without offering reduced pension plans to comply with court ruling prohibiting pension reductions
  • The net effect: Reduce some pension liability
• Connecticut
  • ​The buy-out: Less buy-out & more funding shift. High dollar pension plans would be paid directly through the state budget and off the pension’s liability
  • The net effect: Pension liabilities are reduced via cost shift

Governing | Pension Crisis: Could Buyouts Be a Solution?

This week Nevada Legislature was called into special session for economic development. The details:

• The goal: A new NFL stadium
• The stadium cost to the state: $1.9 B
• The method of finance: increase on the hotel tax
• Additional sweetener: A 0.1 cent sales tax increase to fund more law enforcement in the resort area that would service the stadium

Las Vegas Review Journal | More Cops tax hike heads to Nevada Legislature along with stadium proposal

Informed Intel on September 7th, 2016:

Trend from West. Special Sessions of Legislature for Economic Development.

The State: Nevada

Economic Development Special Sessions:

• 2014 incentives for Tesla
• 2015 incentives for Faraday
• Potential 2016 incentives for a new Raiders Stadium

Economic Arguments for a NFL Stadium in Las Vegas:

• $750 million public contribution base don raising hotel taxes
  • the state is only on the hook for a 1/3 of the stadium cost
• the hotel tax would be put to its intended purpose- to put more heads in beds

Entities behind the stadium push:

• Las Vegas Sands (Sheldon Adelson)
•  Majestic Realty
• Oakland Raiders

Las Vegas Sun | Nevada Legislature mulls special session on NFL stadium

The State: California

Signed by Gov. Brown: September 14, 2016

The legislative changes to pension investment managers:

• required disclosure of invesment management fees
• required disclosure of performance fees
• partial disclosure of “the fees private equity firms collect from the companies they buy out”

Calpers and Calstrs board member said it is “the “nation’s most robust transparency requirements” concerning investments in the buyout funds.”

7 States introduced fee disclosure legislation in 2016 only California passed a bill.

BloombergMarkets | California Pensions to Say More on Fees, but Critics Persist

Who: Businesses

Did what? Filed suit against Philadelphia to prevent collection of the new soda tax

What basis did business have to file suit against the City of Philadelphia to stop the soda tax? Business asserts that the new soda tax is:

• against state law that already imposes a 6% sales tax on the products
• against SNAP mandates & could affect the state’s SNAP funds

Forbes | Lawsuit Filed Against Philadelphia In Effort To Stop Soda Tax

Informed Intel on 9th of June 2016:

The Billionaires Behind the Successful Local Soda Tax.

How the soda tax win in Philadelphia was messaged:  A win for education. A win for the coalition of educators, parents, and rec center volunteers

The billionaires/business types supporting the soda tax:

• Former New York Mayor Michael Bloomberg
• Texas billionaires John and Laura Arnold

The impending legal fight: local beverage bottling businessman is filing suit

Dallas Morning News | How Texans helped Philadelphia become first U.S. city with soda tax

The National Institute for Retirement Security “Pensionomics” series put these numbers to the economic benefit of pensions:

• $1.2 trillion in total economic output (2014)
• 7.1 million jobs supported by pension spending
• $190 billion in federal, state and local taxes on pension benefits
• $1 of pension benefit creates $2.21 in economic activity

The National Institute for Retirement Security | “Pensionomics” series

Forbes | Do Public Employee Pension Benefits Stimulate the Economy?

The meat & potatoes. The nuts & bolts. The horse, still waiting on the spurs, of the tentative pension deal reached in Houston:

• The goals of the deal:
  • eliminate under-funding within 30 years
  • avoid $2.5+ billion in future costs
  • benefit reductions
  • $1+ billion in bonds
• What Houston gets:
  • cap on pension liability
  • realistic investment returns
• What needs to happen to bring this deal to fruition:
  • each of the local pension boards need to agree on benefit reductions
  • approval by each fund’s board
  • legislative approval

Texas Public Policy Foundation response: Houstonians still have no say.

Houston Chronicle | Turner unveils tentative pension reform deal

KPRC | Mayor aims to fully fund Houston’s pension plan within 30 years

TPPF 

TEXPERS Executive Director makes 3 points supporting the A.G. Opinion finding that the state is not liable for local pensions:

• The Attorney General affirmed what local pensions know & how they operate
• The state has never been a financial backstop for local pensions
• The Legislature only serves to affirm local agreements as a method of checks and balances

Mondovisione | TEXPERS Amplifies Attorney General’s Opinion on Pension Funds in Statute

7 September 2016 on informed intel:

No, the state isn’t liable for local pension obligations.

Why isn’t the state liable? Two reasons according to the rational in the Attorney General opinion:

• no specific statutory authority
• the constitution prohibits it by:
  • Article III, section 49(a) that limits the creation of state debt & does not include local pensions
  • Article III, section 50 that prohibits the state from lending its credit, which it has not

KP-112

Southeast Texas Record | Tex

Top Performing Pension Overall: Oklahoma’s Teachers Retirement System with a 8.3% return over the last decade

Top Texas Performer:  For private equity annualized performance ranking, Texas TRS with a 15.4% return on private equity

Pensions & Investments Online | State pension funds earn median 6.8% over 10 years, analysis finds

Clearwater Report for State Pensions

Where: Marin, County, California

Whose reform idea? The Executive Director of Marin Association of Public Employees, speaking for himself

The local pension reform proposal:

• Progressive Pensions
• Lower wage employees get 90% of their salary in a pension, while higher salaries get a lower percentage
• The policy goal: Protect the little guy and prevent over the top enrichment that makes for bad headlines

Marin County |  Dick Spotswood: The door is open to public pension reform

• States are loving the strategy of legitimize fantasy sports + offering consumer protection + paying fees to increase state revenues  
• The hiring formula used by fnatasy sports to achieve their strategy:
  • hire local lobbyists + flooded offices with pleas from fantasy sports players+ bring in big name atheletes to hob-knob with legislators + avoid established gaming interests
• Respond quickly to legislators who question the method by:
  • critical emails to their players
  • robo-emails
  • radio ads targeting the lawmaker and promoting fantasy sports

The big state for fantasy sports to win: Texas. Enter State Representative Richard Raymond. 

LAW.COM | How Fantasy Sports’ Bet on State Strategy is Paying Off

Texas Tribune | Lawmaker Pledges Bill to Protect Texas Fantasy Sports Betting

The pension: Houston Firefighters’ Relief and Retirement Fund

The city: Houston

The Court: 14th Court of Appeals

The Opinion: 

• Agreed with the lower court that the City cannot change how the fund is operated.  
  • The fund’s operation are in state law.
• Agreed with the pension fund that Houston fire fighters face unique challenges, unlike other large Texas cities.

Next legal stop? TX Supreme Court

From the Houston Firefighter’s Relief & Retirement Fund:

• Its grown from $468 million in 1988 to $4.63 billion
• Houston pays only about 20% of benefit costs
• 80% of benefits are covered by the fund’s investments and firefighters’ own contributions

Courthouse News Service | Houston Loses Appeal in Firefighter Pension Fight

Last week we learned about the trend to reduce commercial appraisals by the valuation of an empty store.

They’re here. The trend has arrived in Texas. & there’s a trendy name- “dark stores”

Dallas Morning News | Will big box retail’s ‘dark store’ strategy lead to fewer taxes in Texas?

Your Informed Intel on 7th Spetember 2016:

Which commercial property owners are involved? Big Box stores

What is the argument they’re using to lower their property tax bills? That market value is the “sale price of similarly sized but vacant retail buildings”

What local governmental officials say in repsonse? That’s like basing residential property taxes on a foreclosed, vacant home.

Which states have local governments that are feeling the revenue hit? 

• Michigan
• Alabama
• Florida
• Indiana
• Iowa
• North Carolina
• Ohio
• Tennessee
• Washington
• Wisconsin

What have state legislatures done in response? 

• Indiana banned the practice of using vacant stores as market value comparisons
• Alabama gave counties more resources to fight the valuations
• Michigan is considering changes to the appraisal challenge process

Governing | Big-Box Stores Battle Local Governments Over Property Taxes

Who: Robert Lee, Employees Retirement System of Texas’ (ERS) director of investments

Moving to: Texas Tech University System as deputy CIO

When: Starting October 2016

Chief Investment Officer | Texas ERS Hedge Fund Chief Exits

65% of Jacksonville, FL  voters approved a sales tax increase to cover the local pension system.

Pensions & Investments | Jacksonville, Fla., voters approve half-cent tax to fully fund city pension plans

Your Informed Intel on July 9, 2016:

Where: Jacksonville FL

How does the sales tax for pensions work? 1/2 cent sales tax to defer city pension contributions until 2030

What benefits are there to city revenues?

• From 2018 through 2034, the city would spend $857 million less on contributions to its three pension plans
• From 2035 to 2049, the city would spend $2.37 billion more in pension contributions with estimated 1/2 cent sales tax increase revenues being $2.5 billion from 2031 to 2049
• For accounting purposes, the City could use the future sales tax revenue on the current books to offset liabilities

Alternatives to the sales tax increase? property tax increase

Jacksonville | Report on proposed pension fix gives ammunition to supporters and opponents of sales tax

In 2012, South Carolina enacted the following pension reforms that applued to new hires:

• Rule of 90
• Unused leaveis not part of benefit calculations
• Vesting in 8 years, up from 5

The following 2012 pension reforms affected all South Carolina state employees:

• 8% worker contribution, a 1.5% increase phased in over 2 years
• Phased out an incentive program that allowed retirees to return to work and still draw a pension
• Limit all return to work retirees stop drawing benefits when they reach $10,000 in salary in a year
• Standard 1% annual COLA

Charlotte Observer | A look at the Legislature’s last pension reform law

Which commercial property owners are involved? Big Box stores

What is the argument they’re using to lower their property tax bills? That market value is the “sale price of similarly sized but vacant retail buildings”

What local governmental officials say in repsonse? That’s like basing residential property taxes on a foreclosed, vacant home.

Which states have local governments that are feeling the revenue hit? 

• Michigan
• Alabama
• Florida
• Indiana
• Iowa
• North Carolina
• Ohio
• Tennessee
• Washington
• Wisconsin

What have state legislatures done in response? 

• Indiana banned the practice of using vacant stores as market value comparisons
• Alabama gave counties more resources to fight the valuations
• Michigan is considering changes to the appraisal challenge process

Governing | Big-Box Stores Battle Local Governments Over Property Taxes

The State: Nevada

Economic Development Special Sessions:

• 2014 incentives for Tesla
• 2015 incentives for Faraday
• Potential 2016 incentives for a new Raiders Stadium

Economic Arguments for a NFL Stadium in Las Vegas:

• $750 million public contribution base don raising hotel taxes
  • the state is only on the hook for a 1/3 of the stadium cost
• the hotel tax would be put to its intended purpose- to put more heads in beds

Entities behind the stadium push:

• Las Vegas Sands (Sheldon Adelson)
•  Majestic Realty
• Oakland Raiders

Las Vegas Sun | Nevada Legislature mulls special session on NFL stadium

No, the state isn’t liable for local pension obligations.

Why isn’t the state liable? Two reasons according to the rational in the Attorney General opinion:

• no specific statutory authority
• the constitution prohibits it by:
  • Article III, section 49(a) limits the creation of state debt and does not include local pensions
  • Article III, section 50 prohibits the state from lending its credit, which it has not

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Southeast Texas Record | Texas AG opinion: State not ‘liable’ for municipal pension shortfalls

The City Fee: St. Paul, MN street maintenance fee

The argument against the fee: 2 churches sued saying the fees benefited not just them as property owners, but the public at large which made the fee a tax that counts against taxing limits by cities.

The court: The Minnesota Supreme Court agreed and said the fee amounted to a tax.

Governing | A Threat to City Fees?

What is the hidden property tax? Rising proeprty values that cause a property owner to pay more property taxes when tax rates are reduced. 

For or against the hidden property tax? “An increase in property value should not be an automatic increase in property tax revenue.” 

What changes are supported:

• robust & transparent communications with residents to explain why taxing entities need more revenue

Trib Talk | Daniel Gonzalez | Texas Association of Realtors | Time to talk about the hidden property tax

The company: Sandy Creek coal-fired power plant

The County of appraisal: McLennan County

The Appraisal Disrict’s values:

• $900 million in 2014
• $1.17 billion in 2015

The Company’s 2 legal argument to reduce its appraisal by 60%: 

• A willing buyer would pay no more than $380 million for the plant in 2014 and $395 million in 2015
• Creating a recognition that power markets had slumped.

POWER | Texas Coal Plant Wins Tax Appraisal Case, Property Value Cut 60%

Which state house speaker has a pension reform plan? Virginia

What goals does the Virginia Speaker want to achieve?

• Change from defined pension benefits to defined contributions
• Create the Virginia Commission on Employment Security & Pension Reform
•  Reduce the $22.6 billion in unfunded long-term liabilities
• Create a retirement system that attracts & retains employees

Are the Speaker’s pension reform plans supported by state employees and teachers impacted by the reforms? No

The Daily Progress | Speaker’s pension reform push faces budget headwinds, workforce concerns

In 2015, Kansas state pension system (KPERS) issued $1 billion in bonds to maintain the pension. The results:

• The $1billion bond, which was invested, will be able to pay bond service, but little more than that. 
• It is expected that the return will either be even or minimally positive
• For the numerically minded, KPERS assumes an 8% return rate
• KPERS had a $500 m pension bond in 2004. Those funds investment return rate has been 6.68% while the bond rate is 5.39%, generating $156 million for KPERS

Topeka Capital Journal | Kansas issued a $1 billion pension bond a year ago. How is it doing?

New issues emerged at the Sunset Advisory Commission hearing on ERS recommendations.

The new issues:

• Senator Van Taylor is interested in:
  • convicted legislators receiving ERS benefits
  • adding a taxpayer to the ERS board
• Senator Charles Schwertner is interested in ERS alternative investments, hedge fund investments and infrastructure investments best practices and whether Texas practices align with best practices and/or other states.
• Chairman Flynn is working on legislation to add an ERS retiree to the ERS board.

August 22, 2016 Sunset Advisory Commission Hearing on ERS beginning at 11:26:00 

What is the impact of lowering projections for investment returns?

• increased normal pension costs (contributions)
• increased unfunded liabilities

Bond Buyer | Should States Lower Estimates for Pension Investment Returns?

• Low bond rates and high value of the U.S. stock market will keep pension returns lower
• To meet current projected return rates requires higher risk investments

Bond Buyer | Should States Lower Estimates for Pension Investment Returns?

• California wins based on time frame, post-2011, & by using raw numbers counts
• Caliornia is helped by its larger population
• California wins on GDP and personal income growth (0.9% in CA to 0.8% in Texas)

What bodes well for Texas?

• Texas has a lower unemployment rate, for a longer period of time
• Texas has had a better nonfarm employment-to-population ratio
• Examining a bigger picture, from  May 2006 to May 2016, TX job gains of 18.6%.  California experienced 8%.

Politifact Texas | Julián Castro says California besting Texas in creating jobs, economic growth

In lieu of a tax increase, Wyoming is considering recouping the federal tax incentives offered to wind facilities.

Governing | Has the Nation’s Only Wind Tax Paid Off for Wyoming?

• Per pupil spending by state via Census Bureau numbers:
  • Texas #43 at $8,592
  • New York #1 at $20,610
  • Pennsylvania #10 at $13,961
  • California #34 at $9,595
  • Florida #41 at $8,756

What’s included in this per pupil spending amount?

• Instruction: Employee Salaries
• Instruction: Employee Benefits
• Pupil Support
• Instructional Staff Support
• General Administration
• School Administration
• Other

The factors linked to higher per pupil spending:

• High property values
• Experienced Teachers/ Teachers with advanced degrees
• Generous pension benefits

Governing | The States That Spend the Most (and the Least) on Education

New Jersey is cutting its ties to private money managers/hedge funds. New Jersey joins Pennsylvania and California in limiting or eliminating private money managers to hedge their bets for these reasons:

• the hedge funds did not hedge the pension losses
• In New Jersey, the private money managers were working on a projected 8% return. The actual return was -6.5%
• The pensions would have made more money in bonds

Philly.com | New Jersey pension system re-thinks hedge funds

Sacramento has built a new stadium for the Kings. part of the funding mechanism is parking meter revenue.

Sound familiar? Similar revenue sources are bandied about related to Arlington’s new stadium.

Let’s look at Sacramento’s parking meter rate plan:

• 4 Event parking zones will be established in a 12 block radius
• The closer to the Area, the pricier.
  • Parking prices ranging from $11.25, if you pre-arrange parking in a city garage to $18.75
  • Higher event night only prices will be within a 3 block radius of the stadium
  • What is the increase for Kings fans? Previously meters were free on weekends
• Parking meter normal shut down time of 6pm will be extended to 10pm
• Parking meters in midtown will be extended to 8pm
• City parking, and reservation system, will be linked through a smart phone app

Sacramento Bee | Sacramento to ring downtown arena with higher-priced parking zones

The roadblock for fantasy sports legislation in California:  negotiations over legalizing internet poker

Who is behind the push for internet poker? Indian tribes

The opposition to fantasy sports statewide legislation in California and other states:

• existing anti-gambling laws (internet poker in California)
• attorneys generals
• opposition from gaming interests
• gambling opponents

The Recorder | Clock Running on Fantasy Sports Bill in Calif.

Texas Conservative Coalition Research Institute’s piece, Property taxes trigger ‘growing social crises in Texas’, makes the following points:

• Lt. Gov. Patrick chaired a Conservative Coalition group in 2010 that made the property taxes and social crisis link
• Property is no longer the measure of wealth, making property taxes an outmoded system
• Lack of state funding for schools and municipalities leads to higher proeprty taxes and higher debt

The solution proposed: Expanded sales tax

Senior editor at Rice University’s Kinder Institute for Urban Research makes these 4 points about Houston’s $4 billion pension “mess”:

• The $4 billion pension liability in Houston isn’t as shocking as its rapid increase.
  • In 2000, the pension liability in Houston was $0
• There are 2 causes to the pension liability growth:
  • The calculation method backloads costs, which means that even if Houston paid for pension costs in full, liability would continue to accrue
  • Investment Assumptions are not aligning with reality
• What needs to change?  Lower the optimistic rates of return & stop using a rolling amortization schedule

Houston Chronicle | How Houston got into a $4 billion pension mess

Who studied the cost of high risk investments on pensions? Rockefeller Institute of Government

Where did they present their findings?  NCSL

What is the annual cost, nationwide, to pensions of high risk investments? $400 Billion 

What does the study say about pension contributions compared to tax revenue? From 2007-2015, Pension Contributions have increased $0.59 to every $1 of tax revenue.

What has this pension contribution tax rate led to? Riskier investments by pensions

Money | Public Pension Plans’ Risky Investments Could Cost Taxpayers Billions

The reasons the municipal pension crisis will worsen according to the Bond Market People:

• The facts are stacked against local pensions. 
  • Underfunded for years
  • People are costing the pensions more by living longer. 
  • Public sector workforce is flat, but the number of retirees increases
• Pension systems did not account for increases in retiree numbers.
• Actuarial methods for accounting for life spans by pensions do not take into account longer life spans.
  • Private pensions use a better life span formula, a generational estimate

Bond Buyer | Why the Municipal Pension Crisis Will Worsen

• Gross receipt taxes do not correlate to the amount of government services a firm uses
• Gross receipt taxes do not correlate to a firm’s cash flow
• Gross receipt taxes push certain industries into high effective tax rates
• Gross receipt taxes reduce competitiveness, fairness, and transparency

Tax Foundation | Gross Receipts Taxes: Lessons from Previous State Experiences

What is the new Rangers Stadium ballot proposal by the City of Arlington? Funding package for the stadium including:

• bonds
• extend & redirect part of its half-cent sales tax
• extend & redirect part of 2%  hotel-motel tax
• extend & redirect part of 5%  car-rental tax
• 10% tax on tickets
• $3 tax on parking

Who filed an ethics complaint? Kelly Canon, Citizens for a Better Arlington PAC

Who was the ethics complaint filed against? the City and Keep the Rangers PAC

What does the Ethics Complaint say? 

• ballot is not specific in relation to bond amounts
• ballot fails to disclose a new tax (an extension of an expiring tax)
• false and misleading statements

Ft. Worth Star Telegram | Group fighting $1 billion stadium files state ethics complaint

Who requested the opinion? Chairman Dennis Bonnen

What question about the use of hotel motel tax revenue does he want answered? Whether a local government can use hotel occupancy tax revenue to fund a feasibility study for a performing arts center.

What’s the kerfuffle? The City of Lakeway attorneys believe they’ve met the statutory requirements to move forward with the feasibility study. Some in the hotel motel industry think there is no specific permission to use the revenue in this manner.

RQ-0122-KP

Which state became the 1st to tax streaming content? Pennsylvania

Does this tax have a nickname? Netflix Tax

Which tax was extended to streaming video? The state sales tax

What does the tax apply to? streaming video services like Netflix and Hulu plus ebooks and music

Is there a netflix tax elsewhere? In Chicago, which extended an amusement tax to steaming services

Governing | The Week in Public Finance: The Netflix Tax, Another Atlantic City Rescue and More

CBS Pittsburgh | ‘Netflix Tax’ Goes Into Effect In Pennsylvania

The Start Ups in litigation funding: LexShares Inc. & Trial Funder Inc.

How do they work? Electronic platforms. Attracting 1000s of investors. Promising double didget returns.

The Wall Street Journal | Litigation Funding Moves Into Mainstream

• It does not help those with little moneyto buy school supplies
• Stores increase prices for the sales tax holiday
• It helps out-of-staters 
• $70M revenue hit to Texas
• No benefit to economic growth

KERA | 5 Reasons Tax Free Weekend Might Be A Bad Deal

The bill: HB 1378 (2015)

The information local governments have to provide to the Office of the Comptroller:

• amount of all authorized debt
• the principal of all outstanding debt
• the principal of each outstanding debt
• combined principal and interest required to pay all outstanding debt obligations
• amount of debt secured by ad voloreum bonds
• credit rating
• amount of debt per capita

Reporting deadline: 210 days after the end of the local government’s FY16

Which local governmental entities are required to comply?

• counties
• cities
• school districts
• junior college districts
• special purpose districts
• other subdivisions of state government

Comptroller | HB 1378: Local Government Debt Transparency

Which city is proposing to fill its pension deficit with a tax? Chicago

Which tax options did the mayor consider? Increasing property taxes or increasing utility taxes 

What’s the proposed water tax rate increase? An escalating utility tax that looks like this:

• Year 1: 7% tax
• Year 2: Double it. 14% tax
• Year 3: 21% tax
• Years 4& 5: 28% utility tax

How much revenue does Chicago think the utility tax will collect?  $239 million over 5 years

What’s the cost per home owner?

• year 1: $4.43 more month /  $53.16 per year
• year 5: $225.96 a year

What do opponents say about the utility tax? It’s regressive

Chicago Sun Times | Pension fix: 28 percent water/sewer tax, phased in over 4 years

• Eerie, PA pension costs trippled in 5 years, schools cannot afford basic items like textbooks or roofs without leaks
• CALPERS & CALstrs have reduced 20 year return rates to roughly 7%
• The pension woes are blamed for reduction in teacher jobs and job seekers

Fortune | The Ugly Ways the Pension Crisis Is Affecting Your Kids’ School

Wall Street Journal | Why Pensions’ Last Defense Is Eroding

On Monday July 25th, the Comptroller told the LBB:

• Texas is in a better position than other energy producing states
• Texas has an unspent surplus of $4 billion from 2015
• Texas is NOT in a recession
• Texas has positive job growth
• June 2015- June 2015 Texas job growth was 1.4%, below the 1.7% national average

Houston Chronicle | Comptroller: Texas lags nation in job growth

Galveston County  tax collector-assessor Cheryl Johnson recommends the following legislative fixes:

• Requiring the state comptroller’s office to sign off on industrial property values.
• Establishing a state-financed legal defense fund for counties facing appraisal lawsuits.

Travis County Chief Appraiser Marya Crigler emphasizes that some form of sales price disclosure would make the appraisal process more efficient and cost-effective.

Watchdog.org | Commercial lawsuits blow back on Texas taxpayers

• Taxpayers pay for the legal fees of the appraisal districts defending its commercial appraisals.
• Taxpayers cover the revenue hit to the taxing jurisdictions when lower commercial appraisals reduce revenue.
• Sen. Kelly Hancock “speculated that Texas counties punish homeowners with inflated appraisals to offset “lost” commercial tax revenue.”
• What does this look like in big Texas counties?
  • Austin
    • ​413 lawsuits
    • $11.3 billion in values are being contested
    • Travis County Appraisal District boosted its legal budget by 20% to cover challenges
  • San Antonio
    • ​$19.4 billion in appraisal disputes in the last year
  • Texas wide
    • 4,000 appraisal challenges in the last year
    • reducing taxable values on average 7.5%

Watchdog.org | Commercial lawsuits blow back on Texas taxpayers

Which Texas city offered a developer a del via a TIRZ? Galveston via the The Galveston Island Redevelopment Authority

What development was promised? Beachtown, which by 2013 was to include:

• a hotel
• 306 single-family houses
• 200 multifamily units
• 250 units of retirement housing

Was the development completed? No

What facts does the lawsuit highlight?

• Secret negotiations, secret meetings in violation of the Open Meetings Act
• Allegations that the developer forced replacement of commissioners on the Galveston Island Redevelopment Authority
• A contractual gag order on local officials to not discuss the deal

Houston Chronicle | Galveston development project shrouded in secrecy despite public investment

The State: Alabama

The legislative mechanism: A special session of the Legislature for the “specific task of approving a lottery to fund “essential services.”

The revenue shortfall source: Medicaid. Medicaid has doubled in size in the last decade.

The beneficiaries: Rural hospitals whose major patient pool is from Medicaid 

Does Alabama have a lottery currently? No, Alabama is 1 of 6 states without a lottery.

Yellow Hammer News | IT’S OFFICIAL: Bentley urges legislature to approve lottery to fund Medicaid growth

LBB Issued new Guidance to Agencies on their Legislative Appropriation Requests (LARs). The new LAR items:

• New: Budget Overview Schedule. No new data, just a new format with a concise overview
• New: Program-Level Request Schedule. Contrasts previous bienium expenditures with request
• New: Summary of Behavioral Health Funding Schedule.  List behavioral health or substance abuse services expenditures
• Deleted: Budgetary Impacts Related to Federal Health Care Reform and the Budget Control Act 
• Administrator’s Statement concerning the mandated 4% cut
• Exceptional Item Request Schedule 4.A: Information Technology.  Specifically if there is an IT contract or contracts with outside entities from amounts in excess of $50,000. 
• Ten Percent Biennial Base Reduction Options. reduction options should also include estimates of any losses in revenue, including Federal Funds, as part of the agency’s impact statement within the schedule.
• Transferred Programs.  Agencies receiving a transferred program or function should not re-enter historical expenditures for a transferred program 
• Schedule 3.A. Strategy Request. More specifics required to justify a biennial change
• Centralized Accounting and Payroll/Personnel System (CAPPS) –  include all ongoing costs to support and maintain their systems.

LARs are due to LBB in August. 

LBB | Updated 2018-19 agency CAPPS listing on page 45 of the LAR Instructions
 

6 states have enacted laws to support fantasy sports in 2016:

• Colorado
• Missouri
• Mississippi
• Tennessee
• Indiana
• Virginia

21 states did not formally legalize fantasy sports, including: Alabama, Arizona, Connecticut, Delaware, Florida, Georgia, Hawaii, Iowa, Kentucky, Louisiana, Maryland, Minnesota, Nebraska, New Mexico, Oklahoma, Rhode Island, South Carolina, Vermont, Washington, West Virginia, Wisconsin.

7 states could still act on fantasy sports laws in 2016, including: California, New Jersey, Pennsylvania, Illinois, Massachusetts, Michigan, New York (awaiting governor’s signature)

AP | AT LEAST 6 STATES ADOPT FANTASY SPORTS LAWS; 21 OTHERS DON’T

How did the Permanent School Fund add $98 million in the past 6 months? A 3x increase in Oil & gas leases for Texas’ publicly held land 

How many acres of state land have been leased in the last 6 months? 13,000+ acres

What does this mean for the Permanent School Fund? $98 million in revenue

Average price per acre: $7,365, compared to around $2,500 per acre in January and about $1,700 in August 2015

Statesman | Texas oil and gas leases jump despite oil price slump

• Pension Debt per household
  • Texas is #33 with per household pension debt of $27,343
  • Alaska is #1 with per household pension debt of $113,137
  • California is #3 with per household pension debt of $77,700
• Pension Debt per Capita
  • Texas #42 at $9,235
  • California #4 at $25,325
  • Alaska is #1 at $38,251
• Actuarial Funded Ratios
  • Texas #20 at 81.6%
  • California #24 at 79.4%
  • D.C. #1 at 108.3%

Stanford Institute for Economic Policy | Pension Tracker

Which public pension system is the world’s largest? Japan’s The Government Pension Investment Fund

The parameters for its socially responisble investment: environmental, social and corporate governance factors

Wall Street Journal | Japan’s Public Pension Fund Looking for Socially Responsible Stocks

Harvard Business Review tells us that public pensions perform better when these charactersitics exist:

• Pensions are free from politics & able to focus on maximum returns
• Avoid poor investment choices by public pensions that are linked to:
  • elected official interference related to local economic devleopment
  • elected official interference related to compensation or recruitment of talented staff
• Strong governance model protects pensions from political whims that diminish returns 

Harvard Business Review | Public Pension Funds Perform Better When They Keep Politics at Bay

Why are we concerned about legal issues related to the sharing economy

• Within 4 years, 40% of all American workers will be independent contractors

The top legal issues related to sharing economy:

• Liability
•  Insurance coverage- whose responsible for it?
• Are people engaged in sharing economy employees or indpendent contractors?
• Does the sharing economy, using an app, trigger products liability?

California Bar Journal | On the road to a gig economy, litigators take the wheel

The State: California

The tax cut: Removing the sales tax to cover newspapers and other good

How long had the tax on newspapers been in place? 25 years

Annual tax revenue on subscriptions: $50 million

Sacramento Bee | After 25 years of taxation, California newspapers on verge of tax break

Which pension system is diversting from guns? New York City Pension Fund

What divestment is occuring? A divestment of 3 retailers that sell guns:

• Dick’s Sporting Goods
• Cabela’s
•  Big 5 Sporting Goods

How big is the New York City Pension Fund? $59 billion

Who voted to divest from gun retailers? board of trustees of the New York City Pension Fund

What do the activists say? “We will no longer do business with companies that fund the deaths of our family members and friends.”

New York Times | Dealb%k| New York City Pension Fund to Divest Itself of Gun Retailer Stock

Which pension merged the 13th check fund to the main pension fund? Wayne County Michigan

Did eliminating the 13th check impact pension soundness? Yes, by rolling the 13th check fund into the pension fund pension funding levels improved by 9% within 1 year

Detroit Free Press | Wayne County pension system funding sees improvement