Forget The Phony Pension Accounting, Here"s How Much Your State Pension Is Really Underfunded

The phony assumptions that go into calculating public pension underfundings in the United States are a frequent topic for us.  As our readers are aware, state pension administrators are given fairly wide leeway to simply pick a discount rate out of thin air.  Of course, since pensions are nothing but a massive stream of future liabilities that stretch out into perpetuity, every 100 bps increase can substantially, and artificially, lower the fund"s reported underfunded level. 

In fact, we estimated the impact of higher discount rates on underfunding levels in a post entitled "An Unsolvable Math Problem: Public Pensions Are Underfunded By As Much As $8 Trillion"...here was the result:

Fortunately, we"re not the only ones that see through the ridiculously phony assumptions that go into duping retirees and taxpayers as the team at American Legislative Exchange Council (ALEC) has just dropped a report which reviews the financial health of public pensions all over the country if you toss out their 7.5% discount rate and replace it with a risk free rate...

Faulty accounting and reporting methods obscure the magnitude of unfunded liabilities. Partly in response to the devastating impact of the Great Recession, the Governmental Accounting Standards Board (GASB) made two significant changes in 2012 (Statement No. 67, Financial Reporting for Pension Plans and Statement No. 68, Accounting and Financial Reporting for Pensions) to the methods used for measuring the financial health of pension plans. GASB intended these changes to increase transparency, consistency, and comparability of pension information. Public pensions are now required to report their assets and liabilities using a standardized actuarial cost method, to disclose investment returns, and to include unfunded pension liabilities on state balance sheets.

 

Unfortunately, states have found ways to work around these requirements and paint an unrealistically rosy picture of their pension funding status.

 

The Center for State Fiscal Reform at ALEC analyzes the annual official financial documents of more than 280 state-administered pension plans using more realistic investment return assumptions in order to gain a clearer picture of the pension problem. The unfunded liabilities of each pension plan are revalued using a discount rate equal to a risk-free rate of return, best represented by debt instruments issued by the United States government. This year"s study uses a risk-free rate of 2.142 percent, derived from an average of the 10- and 20-year U.S. Treasury bond yields over the course of 12 months spanning April 2016 to March 2017. Based on these revised investment return assumptions, we report on total unfunded pension liability, unfunded pension liabilities per capita, and the funding ratio of these plans.

...and as you might expect, the results are fairly bleak.  In terms on aggregate underfunding, ALEC figures our taxpayer-funded pension ponzis are roughly $6 trillion underfunded, or roughly 2-3x worse that the often-quoted $2-$3 trillion underfunding calculated by state pension administrators.  Meanwhile, using ALEC"s discount rates, the state of California is nearly $1 trillion underfunded by itself.

So, what is your personal share of these massive public liabilities?  Well, if you"re in one of the 10 bottom states it"s anywhere from $25,000 to $45,000.  Of course, that"s the liability for every man, woman and child so the typical American household (with 2.57 residents) in those states is on the hook for $67,500 - $115,650.

Finally, and perhaps most shocking of all, ALEC found that when using a risk-free discount rate only 1 state pension in the entire country was more than 50% funded.

ALEC"s full report can be reviewed here:

How Does Your State Measure Up On Student Free Speech?

Authored by Casey Mattox via Alliance Defending Freedom,

More than four decades ago, the Supreme Court made it clear that public college students do not sacrifice their constitutional rights when they arrive on campus, finding “no room for the view that … First Amendment protections should apply with less force on college campuses than in the community at large.”

Yet the reality of most students does not reflect the promise of the “marketplace of ideas.” Universities are regulating what students may say, when and where they can say it, and even who will speak for them. Increasingly, state legislatures are responding by enacting laws to protect student free speech.

We are pleased to release today a review of these state laws – highlighting the states that have protected free speech on their state-funded campuses … and those that have a lot of work to do.

The Problem

For decades, universities have enacted “speech codes” to regulate student expression. These policies limit what students may say and often take the form of “harassment,” “civility,” or similar policies that lump constitutionally protected speech in with true threats, harassment, and other unprotected speech. For instance, just last year, Alliance Defending Freedom (ADF) successfully challenged an Iowa State policy that deemed speech “harassment” if other students thought it was not “legitimate” or “necessary” or “lacked a constructive purpose.” Despite these policies being clearly unconstitutional, they are very common.

In addition to restricting what students may say, many universities have also strictly limited when and where students may speak – often combining these limits with requirements that administrators approve student speech or literature distribution in advance. North Carolina State required students to notify the administration five days in advance of any oral or written communication anywhere on campus until we sued and a federal court ordered the policy changed. And one school has even arrested Young Americans for Liberty members for distributing the Constitution on their campus.

Finally, free speech is only free if students decide who speaks for them. Students regularly join together with like-minded students to advocate for any number of religious, political, or other causes, building community with one another and enriching the campus environment through their advocacy. Like all student groups, they seek to elect leaders who actually share the views that the group intends to promote. But some universities have tried to prevent religious and political student organizations from having that choice.

Why It Matters

Free speech on campus affects all of us. Today’s college students are tomorrow’s legislators, judges, teachers, and voters.

The lessons they are learning about how the First Amendment works will impact our future because what happens on campus will not stay on campus.

Indeed, the Supreme Court has even warned that if we do not protect free speech on campus, “our civilization will stagnate and die.” As dramatic as that sounds, when two-thirds of all Americans now attend college it is only natural that our broader culture will be shaped by what we learn about the value of free speech and religious freedom in those formative years.

How States Are Responding

While the First Amendment protects free speech, universities continue to violate these core constitutional freedoms. The ADF Center for Academic Freedom has litigated federal lawsuits against over a dozen colleges and universities in the last year alone. And we have a 90 percent success rate in challenging these violations of students’ First Amendment rights. If you’re a student, you should know your rights, exercise them, and ensure that your campus is respecting the First Amendment.

Appalled that their public institutions are suppressing rather than supporting free speech and association, states are increasingly enacting legislation to ensure that public universities affirm and protect those values. There are a number of model bills – all of which have their merits. But the American Legislative Exchange Council’s new “FORUM Act” would address all three of these threats to student free speech: ending speech codes, speech zones, and violations of students’ freedom of association. The legislation would also allow students to pursue legal action in state or federal court when their rights are violated.

As state legislatures consider ways to address the threats to free speech on their tax-funded campuses, we are pleased to provide this guide to current state laws protecting the rights of free speech and association on public university campuses. It is our hope that we will have to update this information frequently as more states join the fight to defend the First Amendment on our campuses, teaching students to know their own constitutional rights and respect the constitutional rights of others.

A Shadowy Corporate Lobby Is Quietly Trying to Ban Protesting Across the U.S.

(ANTIMEDIA) So many anti-protest bills have been passed since Trump’s election that the ACLU has launched its own interactive map just to track the legislation. At the writing of this article, at least 25 bills have been introduced across 18 different states.

Unsurprisingly, the North Dakota State legislature has the most anti-protest bills of all the States, with six introduced since November. What is striking about the Statewide legislation, however, is not the quantity of the bills, but the similarities between them.

When Anti-Media first began monitoring the trend in November, Washington state Senator Doug Ericksen had announced plans to introduce a bill that would criminalize demonstrators as “‘Economic Terrorists.” In March, North Carolina also passed a bill creating a criminal classification for “economic terrorism.”

By January, five other ‘anti-protest’ bills had emerged in states across the country, including a particularly contentious bill introduced in North Dakota that would exempt motorists from charges if they “accidentally” hit a demonstrator on the freeway. A nearly identical bill was introduced in the Florida legislature on the same day. Later, a version was also introduced in Tennessee.

Other sets of near-identical legislation include Missouri and North Dakota bills that would prohibit the use of masks during protest and bills introduced in Oklahoma and North Dakota that would increase penalties for trespassing on “critical infrastructure facilities” such crude oil pipelines.

This is not to mention the entire crop of ‘anti-obstruction’ bills introduced in seven different states that would increase penalties for protesters who obstruct traffic.

While there are some bills that are unique, like an Oregon bill that would require community college or public universities to expel any student convicted of rioting, the majority of the bills share such strikingly similar themes and language that it would appear as though these state legislators are working from the same legal template.

As Traci Yoder of the National Lawyers Guild explains, it has become such common practice for special interests groups to draft model legislation at both the state and federal level that it can be difficult to say with certainty who or what is behind the current wave of anti-protest legislation.

The “obvious suspect,” Yoder says, would be the American Legislative Exchange Council, or ALEC, the influential lobbying group comprised of corporate representatives and state legislators who vote as equals on model legislation, which they then hand off to lawmakers.

ALEC gained mass media attention when it was discovered to be the driving force behind the controversial “Stand Your Ground” law that was used to justify the murder of Trayvon Martin, but it was working behind the scenes long before that. It drafts a self-proclaimed 1,000 bills per year, 20% of which become laws.

Of the 26 bills Anti-Media examined, ten were authored or sponsored by at least one known ALEC-affiliated politician, often times more.

If ALEC is behind the recent wave of recent anti-protest bills, it wouldn’t be the first time the ‘non-profit’ organization has sponsored such legislation. In 2003, ALEC-crafted legislation for states that would have criminalized animal rights activists protesters as “eco-terrorists” — in conjunction with their push for the federal Animal Enterprise Terrorism Act (AETA), which they had also drafted. AETA was passed in 2006.

“While there is no indication that anti-protest legislation is on ALEC’s current agenda, it is worth noting that the kinds of protests being targeted are all in conflict with ALEC’s anti- worker and anti-environmental platform,” Yoder wrote, referencing ALEC’s 2016 agenda.

In ALEC’s 2016 annual report, published earlier this month, ALEC also expressed a reinvigorated interest in guiding state legislative decisions.

“Now more than ever, your focus should be on the states. Right now, we are at a crossroads in American history where an incredible number of important decisions about our future are going to be made—and they are going to be made by the states,”  ALEC Chief Executive Officer Lisa B. Nelson writes.

Other likely suspects, Yoder writes, are police unions such as the Police Executive Research Forum.

“Given the pro-policing approach of the Trump administration, it would be unsurprising if law enforcement organizations prioritized criminalizing protest activity.”

Of the 25 bills introduced since November, seven have been defeated or postponed indefinitely. But this is far from over. In fact, if history is any indicator, the next iteration of anti-protest laws will come — only they will be more subversive.

“As we saw from the AETA/ALEC example, we should expect to see parts of these bills introduced elsewhere should they fail in their current form.”

Here is a rundown of the latest anti-protest legislation around the country:

• Total Bills: 26


• Total States: 18


• Bills passed: 7


• Bills failed: 8


• Bills pending: 11


• Bills sponsored by at least one known ALEC associate: 15

State	Bill #	Description	Status	Known ALEC sponsor(s)
Arizona	SB 1142	SB 1142 Adds “rioting” to crime statute; enables police to seize assets of protesters	FAILED (passed Senate, House Speaker said will not move forward)	Sen. Steve M. Smith (R-23), Public Safety and Elections Task Force[1][3]
Colorado	SB 17-035	SB 17-035 Makes obstructing or tampering with oil and gas equipment punishable with up to 18 months in prison and/or $100,000 in fines	pending	none
Florida	SB 1096	SB 1096 Exempt drivers from liability if they hit protester who is obstructing traffic	FAILED (“Postponed indefinitely”)	none
Georgia	SB 160	SB 160 Makes blocking any highway, street, sidewalk, or other public passage a ‘high and aggravated misdemeanor.’	PASSED	Sen. Steve Gooch (R-51); Commerce, Insurance and Economic Development Task Force[34]
Indiana	SB 285	SB 285 Authorizes police to remove protesters “by any means necessary”	Pending, “by any means necessary” clause removed and replaced with fines	none
Iowa	SF 111	SF 111 Would criminalize highway protesters with felony charges and five years in prison	pending	none
Michigan	HB 4630 and HB 4643	HB 4630 Would fine picketers up to $1,000/day for individuals and up to $10,000/day for unions   HB 4643 Would make it illegal to picket under specific circumstances including obstruction of traffic	FAILED (Both shelved)	Rep. Amanda Price (R-89), Tax and Fiscal Policy Task Force[8] (primary sponsor of -HB 4630 and co-sponsor of HB 4643)
Minnesota	HF 322 and HF 55	HF 322 would make protesters foot the bill for governmental costs related to policing unlawful demonstrations HF 55 Makes obstruction  of highways punishable as a  “gross misdemeanor”	Both pending	HF 322: Rep. Steve Drazkowski (R-21B)[4], ALEC Civil Justice Task Force Member[1], Rep. Cindy Pugh (R-33B)[9], Sen. John Howe (R-28), ALEC member[1], Rep. Matt Dean (R-38B)[4], ALEC International Relations Task Force Member[1], Rep. Linda Runbeck (R-38A), ALEC Tax and Fiscal Policy Task Force Member[1. HF 55: Rep. Linda Runbeck (R-38A)
Mississippi	SB 2730	SB 2730 Highway protesters would face fines of up to 10,000 and five years in prison	FAILED (Died in committee)	none
Missouri	HB 179	HB 179 Makes it  illegal for protesters to wear masks, hoods or other coverings that disguise identity	pending	none
North Dakota	HB 1304, HB 1293, HB 1426, SB 2302, SB 1203 and HB 1193	HB 1304 prohibits the use of masks, hoods or face coverings for concealment during “the commission of a criminal offense” HB 1293 Makes it a crime to trespass “critical infrastructure facility” punishable by fine of $1,000 or 6 months in prison; anyone who vandalizes infrastructure can be charged with a felony punishable by 100,000 dollar fine or 10 years in prison HB 1426 creates different classes of penalties for “rioting” SB 2302 allows the attorney general to appoint ad hoc special agents for specific law enforcement purposes, including protests SB 1203 Exempt drivers from liability if they hit protester who is obstructing traffic HB 1193 Would create “economic harm” provision where protesters who case $1,000 in economic harm would face up to five years in prison and/or a $10,000 fine	HB 1304 PASSED HB 1293 PASSED HB 1426 PASSED  SB 2302 PASSED SB 1203 FAILED HB 1193 FAILED	HB 1304: Rep. Alan Carlson (R-41, House Majority Leader), Tax and Fiscal Policy Task Force Member [4] and former ALEC State Chairman[5], Rep. Craig Headland (R-29), ALEC Tax and Fiscal Policy Task Force Member[4], Rep. Kim Koppelman (R-13), ALEC Civil Justice Task Force Member [3] HB 1293: Rep. Craig Headland (R-29), ALEC Tax and Fiscal Policy Task Force Member[4], Rep. Kim Koppelman (R-13), Rep. Mike R. Nathe (R-30), ALEC State Chair[16], and International Relations Task Force Member[17] HB 1426: Rep. Kim Koppelman (R-13), Rep. Karen Rohr (R-31) SB 2302: none SB 1203: Rep. Vernon Laning (R-68)[13], Rep. Karen Rohr (R-31) [19] HB 1193: Rep. Lawrence R. Klemin (R-47), ALEC Public Safety and Elections Task Force Member [9], Rep. Kim Koppelman (R-13), ALEC Civil Justice Task Force Member [3]
North Carolina	SB 229 and HB 249	Introduced after protesters spoke out against former Governor Pat McCory, SB 229, expands current law to make a crime to threaten or intimidate a current or former legislative officer in retaliation for their duties. HB 249 Would charge any person who willfully “impedes or disrupts the regular course of business” with felony crime of ‘Economic Terrorism’	both pending	none
Oklahoma	HB 1123	Makes it a misdemeanor to trespass or enter  “critical infrastructure facility” punishable by fine of $1,000 or 6 months in prison; anyone who vandalizes infrastructure can be charged with a felony punishable by $100,000 fine or 10 years in prison	PASSED	none
Oregon	SB 540	Would require community college or public universities to expel any student convicted of riot	pending	Rep. Kim Thatcher (R-25)[9][10][1]
South Dakota	SB 176	Authorizes the commissioner of school and public lands to prohibit groups of 20+ people from “congregating” on public lands,  Makes obstructing highways a Class 2 misdemeanor	PASSED	Rep. Kris Langer (R-25)[19]Ryan Maher and Rep. David Novstrup (R-3), ALEC Public Safety and Elections Task Force Member [20]
Tennessee	SB 944	Would immunize drivers from liability if they hit a protester who is obstructing traffic	pending	Sen. Bill Ketron (R-13), ALEC State Chair,[17] ALEC Energy, Environment and Agriculture Task Force[9] and Tax and Fiscal Policy Task Force member,[8] attended 2011[18] and 2015 ALEC Annual Meetings.[15] Ketron told The Tennessean that 6 other senators and 22 Tennessee legislators attended the 2015 ALEC meeting.[15]
Virginia	SB 1055	Raises penalty  for remaining at a protest after dispersal order is given	FAILED	none
Washington	SB 5009	SB 5009 Creates classification of “economic disruption” (earlier deemed “economic terrorism”) for obstructing passageways of trains and other infrastructure	pending	Sen. Doug Ericksen (R-42), ALEC Health and Human Services Task Force Member[16]

Creative Commons / Anti-Media / Report a typo

Iowa State Snowflakes Upset Over Prisoner Wage Rates; It's "Modern Day Slavery"

Authored by The College Fix,

On Friday about 40 protesters at Iowa State University demonstrated against the school’s use of prison labor “to acquire furniture.”

According to the Iowa State Daily, the group ISU Student Action organized the event because “prisoners may be paid as little as 15 cents per hour” … apparently not considering the fact that these laborers are incarcerated.

“Iowa prison industries should be more interested in reform and community change, but are instead interested in profiting off nearly-free labor,” said biology major Apple Amos.

Amos and fellow activists said prison labor is “modern day slavery” and demanded ISU students “hold [the school] accountable” for its relationship with state hoosegows.

From the article:

The protesters’ charges broadened as they directed their attention to racial problems within Iowa Prison Industries. African Americans make up around 3 percent of Iowa’s population, but nearly 26 percent of all Iowa prisoners are black, according to participants in the protest.

“If we’re really concerned with creating a better future, we need to start on college campuses by ending these injustices,” David Karayof, vice president of the Iowa State Young Democratic Socialists said. Amos then led the group in a march to Beardshear Hall, chanting as they went.

“The people’s rights are under attack! We stand up and we fight back!” the protesters chanted. …

“The profit prison industry needs to be destroyed,” [ISU alumnus and Black Lives Matter activist Sean] Carlton-Appleton said. “They go after people who can’t afford good lawyers; Poor people, poor black people, poor brown people, trans people, people who society doesn’t really care too much about.”

“That ain’t right!” protesters said, in unison, in response to Carlton-Appleton.

Carlton-Appleton and other protesters accused the American Legislative Exchange Council (ALEC) of “profit[ing] from the deliberate misfortune of America’s disenfranchised”:

“[Corporations] pay legislators… and give them financial incentives to target certain demographics of people… to police and incarcerate them at alarmingly high rates,” Carlton-Appleton said.