Pension funding 2009-2013

A recent paper from the Center for Retirement Research at Boston College reports on funding levels for state and local pension plans for FY2009, the first year that reflects the financial crisis, and projections for 2010-2013.

The report covers: (1) the evolution of public sector funding, which from the early 1980s made significant progress until the 2008 market collapse; (2) 2009 status of plans; and (3) projections for 2010-2013 under three different scenarios for the stock market (Dow Jones Wilshire 5000 Index).

An appendix of 109 state and 17 local plans provides ratios of assets to liabilities for 2001-2008 and estimates for 2009. The aggregate funding ratio declined from 91.4 in 2001 to 84.3 in 2008 and 78.5 in 2009. Hawaii went from 90.6 (2001) to 68.8 (2008) to an estimated 62.9 (2009).

From the Conclusion:

The key question is what should be done. A major increase in contributions is not realistic at this time....if funding levels are to be restored quickly, the money must come primarily from tax revenues. But the recession has decimated tax revenues and increased the demand for state and local services. Thus, finding additional taxes to make up for market losses will be extremely difficult. One small step that would be viewed as a commitment to responsible funding would be for states and localities to at least pay their full ARC [annual required contribution]. Otherwise, the only option is to wait for the market and the economy to recover.

The Funding of State and Local Pensions: 2009-2013, April 2010
      Report (pdf, 18pp/268kB)
      Introduction

Accountability in education

The Aspen Institute Education and Society Program produced a wrap-up of its July 2009 workshop on accountability policy, focusing on six core principles as a framework for future discussion. Workshop participants recommended that education accountability systems should:

1. Set clear outcome goals and progress targets
2. Account for all groups of students
3. Employ multiple sources & types of evidence
4. Communicate clearly to all stakeholders
5. Motivate people at all levels of the system
6. Work within a comprehensive system to improve outcomes

The group found that:

Calibrating the right mix of pressure and support is complicated in our system of divided school governance, because it is difficult to coordinate across the systems. Under current rules, one level establishes the overarching accountability goals and targets (federal), another sets the standards and assessments upon which the determinations will be based (state), and yet another (district) is charged with performance management and technical assistance to low-performing schools – and all three control elements of resource allocation....Accountability policies should be cognizant of the tensions inherent in setting policies across these levels and seek to maximize the comparative advantage of each.

Core Principles for New Accountability in Education (pdf, 19pp/576kB), April 16, 2010

Patient safety and malpractice claims

The RAND Institute for Civil Justice issued a report on the correlation between patient safety in hospitals and malpractice claims against physicians and facilities. The study focused on California, examining safety data for hospitals from 2001 through 2005. The team used the inpatient database for California from the Healthcare Cost and Utilization Project HCUP and applied Patient Safety Indicators PSIs to the dataset. PSIs consist of 20 classes of events and complications potentially harmful to patients. Researchers analyzed approximately 365,000 adverse safety events and 27,000 malpractice claims. Among the report's conclusions:

Ultimately, it would be desirable to link specific safety practices and interventions not only to bottom-line improvements in safety outcomes for patients, but also to reductions in malpractice activity against providers—an aim that has recently been identified by the President as a target for new large-scale demonstration projects (White House, 2009a). In turn, improved safety practices and quality in the delivery of care could provide a reward to the provider community, in the form of reduced malpractice activity and costs, perhaps thereby spurring further investigation of new safety interventions and avenues for improving care.

Is Better Patient Safety Associated with Less Malpractice Activity? Evidence from California, April 15, 2010
      Technical Report (pdf, 39pp/768kB)
      Summary (pdf, 6pp/180kB)
      Research Brief (pdf, 3pp/84kB)
      News release

Cloud save$

The Brookings Governance Studies Program published a report on cost savings the federal government could achieve through cloud computing. Darrell M. West, Governance Studies Director, found that government agencies moving to the cloud have seen 25-50 percent savings, which could translate to billions saved by the federal government as a whole. However, there is a wide variation in estimates of cloud savings. West cites these factors:

• How extensive the migration is and whether the cloud deployment focuses on applications, service delivery, or platform storage
• Reliance on public, hybrid, or private clouds
• The efficiency of capacity utilization, reducing the number of servers
• Level of privacy and security protection
• Extent of labor savings, whether an agency can reduce personnel

While the paper's focus is on the federal sector, it also reports on savings made in e-mail service by the city governments of Los Angeles, Washington DC, and Carlsbad, CA, and 311 management in Miami.


Saving Money Through Cloud Computing, April 7, 2010
      Report (pdf, 14pp/288kB)
      Executive Summary

Public trust doctrines

An article on western states' public trust doctrines - "emphasis on the plural" according to author Robin Kundis Craig - appears in the latest Ecology Law Quarterly. In the "arid West," a state's public trust doctrine is a legal tool "that can re-balance private and public rights in water."

The article notes four key factors in the evolution of public trust doctrines in the West:

1. the severing of water rights from real property ownership and the riparian rights doctrine,
2. subsequent state declarations of public ownership of fresh water,
3. clear and explicit perceptions of the scarcity of water and the importance of submerged lands and environmental amenities, and
4. a willingness to consider water and other environmental issues to be of constitutional importance and/or to incorporate broad public trust mandates into statutes.

From these factors, the author found two important trends:

1. the extension of public rights based on states’ ownership of the water itself, and
2. an increasing, and still cutting-edge, expansion of public trust concepts into ecological public trust doctrines that are increasingly protecting species, ecosystems, and the public values that they provide.

An appendix provides summaries of the public trust doctrines of 19 western states: AK, AZ, CA, CO, HI, ID, KS, MT, NE, NV, NM, ND, OK, OR, SD, TX, UT, WA, and WY. The water law system of Hawaii is described as: "Combination of Native Hawaiian rights with elements of both riparianism and prior appropriation."


"A Comparative Guide to the Western States’ Public Trust Doctrines: Public Values, Private Rights, and the Evolution Toward an Ecological Public Trust" (pdf, 146pp/756kB), in Ecology Law Quarterly, 2010, vol. 37, no. 1, pp. 53-197

Unfunded mandates

The federal government may require state, local, and tribal governments and private-sector entities to expend funds for national goals. The Unfunded Mandates Reform Act of 1995 (UMRA, pdf, 25pp) was passed to ensure that Congress receives information about proposed federal mandates before enacting legislation. UMRA requires the Congressional Budget Office (CBO) to prepare "mandate statements" for bills approved by authorizing committees.

In those statements, CBO must address whether the direct costs of a bill’s federal mandates would be greater than the thresholds established in UMRA and identify any funding that the bill would provide to cover those costs. If the total direct costs of all mandates in the bill exceed the statutory threshold in any of the first five fiscal years in which the mandate is in effect, CBO must provide an estimate of those costs (if feasible) and the basis of its estimate.

CBO published a report on its UMRA activities in 2009. Per the Director's Blog: "As in previous years, few laws enacted in 2009 contained mandates whose costs, in CBO’s estimation, would exceed UMRA’s thresholds."

A Review of CBO's Activities in 2009 Under the Unfunded Mandates Reform Act
      Report (pdf, 82pp/3.4MB), March 2010
      Blog, April 1, 2010