Schwarzenegger Weighs in on Public Pensions

Ian Scott on Monday, August 30, 2010 at 2:30:12 pm 

You don't have to search long to find articles about public pension liability these days.  And they are appearing in the biggest publications from high profile authors.

Last Friday the Wall Street Journal ran an opinion column from California Governor Arnold Schwarzenegger focused on the retirement cost of California's public sector workforce.  Here's an excerpt:

As former Speaker of the State Assembly and San Francisco Mayor Willie Brown pointed out earlier this year in the San Francisco Chronicle, roughly 80 cents of every government dollar in California goes to employee compensation and benefits. Those costs have been rising fast. Spending on California's state employees over the past decade rose at nearly three times the rate our revenues grew, crowding out programs of great importance to our citizens. Neglected priorities include higher education, environmental protection, parks and recreation, and more.

Much bigger increases in employee costs are on the horizon. Thanks to huge unfunded pension and retirement health-care promises granted by past governments, and also to deceptive pension-fund accounting that understated liabilities and overstated future investment returns, California is now saddled with $550 billion of retirement debt.

Read more at: Public Pensions and Our Fiscal Future


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Chicago Suburb Examines Public Pensions

Ian Scott on Friday, August 27, 2010 at 5:01:14 pm 

Today the Chicago Tribune ran a 'watchdog' type story highlighting two suburban Chicago police officials who's salaries jumped by more than 50% in their last year of employment.  The author draws the link between inflated final year salaries and every escalating pension liability.  Here's an excerpt:

Towns have long been aware of the financial time bomb created by pension deficits, but what happened in Chicago Ridge was hardly unique. Some municipalities are sweetening deals for their top police and fire administrators even as they call for pension reform in Springfield.

Illinois' pension system -- including police, fire and public-sector employees -- is the most underfunded in the nation, according to the Pew Center for the States, with only about half the assets needed to cover a staggering $60 billion in liabilities.

Check out: Padded pensions

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Testing Public Pension Options

Ian Scott on Friday, August 27, 2010 at 9:43:58 am 

Public pension liability is a looming crisis that threatens long term fiscal stability in almost every state.  A 2008 study by the Pew Center on the States found that there is a $1 trillion gap (yes, trillion with a T) between the money set aside by states for public sector pensions and the projected cost of fulfilling pension promises. 

Potential solutions to this problem have generally included: contributing more to public pension funds, improving investment fund oversight, and raising the retirement age and reducing benefits for newly hired public employees.  None of these reform measures directly impact existing retirees, but that could change. is reporting that lawmakers in several states are looking at trimming benefits to current retirees. 

State legislators are beginning to challenge one of the ironclad tenets of public pension policy:  that states cannot legally reduce pension benefits for current and future retirees.

Lawmakers in Colorado, Minnesota and South Dakota voted earlier this year to limit cost-of-living increases they previously had promised to thousands of current and future retirees, who courts historically have protected from benefit reductions. Not surprisingly, retirees in each state have filed lawsuits asking judges to restore their annual benefit increases to what they were previously.

Read more at - States test whether public pension benefits given can be taken away

We'll be watching the outcomes of those lawsuits closely.  In the mean time, you can learn more about this issue by reading The Trillion Dollar Gap.

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Redirecting Traffic in Downtown Richmond

Ian Scott on Thursday, August 26, 2010 at 2:50:03 pm 

The city of Richmond, VA is hoping to alleviate confusion and congestion for downtown drivers by converting one-way streets into two-way streets.  City leaders and urban planners hope the move will make Richmond, particularly the convention center area, a more walkable, drivable and commerce-friendly destination.  Here's an excerpt from a Richmond Times-Dispatch article:

Richmond is poised to take a much bigger step that promises to transform the neighborhoods around the convention center, making them easier to navigate by car and much friendlier to people on foot or bicycle. The city is about to hire a consultant to determine the most efficient way to reverse the web of one-way streets that have made downtown Richmond a puzzle for anyone trying to reach a destination that's in plain sight.

"It's so hard to get around downtown," said Charles W. Finley, president of the Historic Jackson Ward Association, which represents the neighborhood that the city hopes will blossom around the convention center.

For Richmond, the conversion of one-way streets is perhaps the most critical step in making a reality of the Downtown Master Plan, adopted almost two years ago with a vision of bringing life and commerce back to streets that had become impersonal thoroughfares.

Check out Richmond plans conversion of one-way streets downtown 

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Race to the Top and Common Curriculum

Ian Scott on Thursday, August 26, 2010 at 8:58:00 am 

Readers interested in yesterday's post about the Department of Education's Race to the Top program will probably be intrigued by an article from tracing the emergence of a common curriculum.  Here is an excerpt:

"...the push for common standards didn’t start with the federal government. Rather, it began in the states. In 2005, the National Governors Association led an initiative to get states to use the same measures to calculate graduation rates. That initiative evolved into a broader effort over the past year, as education officials from 48 states Alaska and Texas did not participate worked on developing a new set of academic standards for K-12 schools in conjunction with the NGA and the Council of Chief State School Officers.

The same article also explains how the Race to the Top's effort to promote a standard curriculum may actually backfire.

"Those quiet state-led efforts got tied up in national politics when the administration decided to use the standards as a criterion for Race to the Top. That has made it harder for state officials to convince conservative legislators or board of education members to sign off on the Common Core standards."

Advocates of a common curriculum and standards say the effort would allow students who relocate to another state to pick up more easily.  They also argue that common standards would help colleges evaluate applicants from different states and know what to expect from freshman.

Click to read the full article: Did Race to the Top help or hurt the push for a common curriculum?

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Gearing Up for Ballot Budget Battles

Ian Scott on Wednesday, August 25, 2010 at 6:00:33 pm 

This November, in addition to picking their Congressional Representatives, voters will decide on a host of important ballot measures.  That is nothing new.  Last year, an off-year election, voters in six states decided on 26 statewide ballot measures ranging from gay marriage to gambling to medical marijuana.  This year, however, many of billions of dollars will be at stake on the ballot.

According to the National Conference of State Legislators, 146 statewide measures have qualified for the ballot this November.  Many of those measures will have serious ramifications on state budgets and taxpayers.  For example, voters in Washington State (one of 9 states without an income tax) will decide whether to follow Oregon's lead and tax individuals who earn more than $200K per year.  The measure would generate more than $1 billion in new state revenue.

Voters in other states will have the option to slash state revenue or reduce spending.  Two separate proposals in Colorado would cut property, income and motor vehicle taxes by $3.1 billion.  In Florida, voters can save billions by rolling back the class size requirements they established in 2002. has compiled a list of key measures to follow - Guide to state ballot measures for 2010

For further analysis, check out the article - Billions on the ballot

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Race to the Top Winners Announced

Ian Scott on Wednesday, August 25, 2010 at 11:47:15 am 

Yesterday the Department of Education announced winners for phase 2 of the Race to the Top program.  Nine states, Florida, Georgia, Hawaii, Massachusetts, Maryland, New York, North Carolina, Ohio, Rhode Island, plus the District of Columbia will split $4.35 billion in Federal grants to enhance K-12 education.  First round winners Tennessee and Delaware split $600 million in March.  The program was funded by the economic stimulus package. In all, 46 states and DC have applied for Race to the Top funding.

To meet funding eligibility requirements, states have had to quickly implement education reform policies including: promoting charter schools, including student achievement in teacher evaluation and compensation, and adopting uniform standards for reading and math competency.  Many of the reform measures have put states at odds with their teacher's unions.

The Department of Education has requested $1.35 billion in funding for a third round of Race to the Top in next year's federal budget. 

Learn more about the Race to the Top program:

US Chamber Institute for Competitive Workforce - webpage includes a program time-line and links to applications from winners and finalists.

Department of Education - Race to the Top Fund - in-depth information about the program including rules, guidelines, FAQs, video and audio, ect.

News coverage from

Read Opinions about Race to the Top:

Pro - A Quite Revolution, David Brooks

Con - The problem with ‘Race to the Top’ is the race, Diana Senechal

Mixed - Race to the Top: A sprint when we need a marathon, Matt Miller

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Congrats Chamber of the Year Winners!

Ian Scott on Wednesday, August 11, 2010 at 11:51:00 am 

Congratulations to the 2010 ACCE Chamber of the Year winners:

One winner was selected from between two award finalists in each of the four total revenue categories. Winners were announced at the ACCE Convention in Milwaukee on August 5th.

For more information about the award and to read the program synopsizes from the winners go to

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Family Gathering

Mick Fleming on Sunday, August 8, 2010 at 11:05:58 pm 

Everyone in the chamber world understands the excitement, work, stress and fear of failure when planning for a big event.  When the climate in which such an event takes place is volatile, the apprehension is even greater.  You also understand the feelings of accomplishment when the magic works -- when the buzz and feel of the event is like a family gathering.  The largest meeting of chamber executives in the world took place in Milwaukee last week.  Nothing like this is ever perfect, but it worked.

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Big Week for ACCE

Mick Fleming on Monday, August 2, 2010 at 12:58:03 am 

Nearly 1,000 people traveling to the ACCE family gathering in Milwuakee this week.  We'll try to keep those of you attending satisfied with brats-- whatever they are!   City scene there can help; downtown all walkable and cool.  It's going to a great  event, but Ihave to contantly remind myself and my staff that more members are unable to attend the annual meeting than can in a typical year.  That's why we try so hard to ensure that the staff keeps up its contant with members across the country during pre-conference time.

If you're not taking the summer trip up to the eatern shore of Lake Michigan, holler out to me anyway this week; I'll get back to you somehow from the show.  If you are coming to Muh-Wah-Kee this week, corner me in a hotel hallway for a chat.  If you hadn't made plans either way, be spontaneous.  We'll find you a room.


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