Budgetary woes may leave sex week cold

Earlier this year, Wyoming’s Casper College Wellness Center hosted sex week in the college’s union building. For the third year in a row, between 250 and 300 students have joined together in this arousing event. Who knew taxpayer-funded colleges had such stimulating spending priorities?

No doubt parents and taxpayers are thrilled to know that government is doing something to fuel the sex lives of students in taxpayer-funded colleges. After all, if the government didn’t promote sex, there wouldn’t be any…oh really?

Unfortunately, college budget cramps tightened the screws on a number of programs including nursing, and released instructors and computerized electronic databases. But who needs Internet porn when students can get a taste of the real thing at the Wellness Center?

The budget squeeze has dampened programs across the state, even dousing government spending fires such as Wyoming’s Capitol building renovation in Cheyenne. Originally, the renovation was a stripped down facelift. Plans soon heated up and a towering Taj Majal arose from the wet dreams of enthusiastic legislative empire builders.

This uplift aroused quite a bit of tension. When it looked more and more like empire stimulators desired bazillions of dollars for their Taj Mahal, Wyoming’s Governor Mead drew a line in the sand on the Capitol blowout. Undeterred, excited legislators bore down hard to abort that strategy, trying to screw over another budget to deliver their baby through the back door.

Just what had these legislators so steamed? They said a historic renovation would stimulate tourism to Cheyenne and keep the construction industry in the family way. After all, if government didn’t promote tourism we wouldn’t have any…how progressive!

But with a limp minerals sector, where would the money come from to pay for these wet dreams? No problem. Politicians would dig deep into the pants pockets of Wyoming families to continue stimulating their cronies. Luckily for taxpayers, the tourism and construction industry stimulus got squeezed out in the end. As compensation, perhaps free-spending legislators can give them free condoms, just like Casper College gave to expectant students during sex week.

But Casper College is also in trouble. Although total college revenue is down by about $13 million (state taxpayers fund about half of all college spending), expenses fell by only about $5 million. This math fertility comes from the vacuum aspiration of the college’s $10 million budget nest egg. But this sucking sound has left the nest egg empty. How do sex promoters hope to continue funding sex week and other crucial college programs such as love your body next year?  All college spending would likely be stimulated by a deep dive into your pants pocket in the form of – wait for it – higher property taxes! More sex stuff at the college, however would likely come from higher student fees.

No doubt, students would be thrilled to pay higher fees for sex. After all, sex week is replete with important initiatives. For example, an information table dispensed free condoms and pens. For Valentine’s Day, the center’s “Love Table,” offered surveys for couples and small games such as guessing how many Hershey’s chocolates are in a jar…how enlightened!

Some of the more instructive presentations, and I’m not making this up, included: “Awkward, Jerk-wad, or Stalker? When ‘Creepy’ Becomes Criminal, and How to Protect Yourself.” After sex week, the center hosted a “Love Your Body, Treat It Well” week to provide information and activities to help people develop healthy strategies to take care of and appreciate their bodies…how informative!

But if college officials are not able to strip taxpayers of funds for sex at the college, and with the tourism miscarry by stimulated legislators, maybe college officials can get taxpayers to fund sex week at the new Capitol. That would certainly stimulate something.

Better still, how about a pregnant pause? Instead of expecting more money from taxpayers and students, eliminate programs that offer, and I’m not making this up, HIV testing. Cuts to the nursing program could help make this a reality.

Sweet on Subsidies

Sugar beet farmers are back at the trough, with hat in hand, looking for a handout. Why? Because Wyoming had a cold and rainy winter – wow! What a surprise!

Farmers have grown sugar beets in Wyoming for years so one wonders why they haven’t noticed those cold and rainy winters before. But maybe they have noticed and just don’t care. Why might they not care? Because they can harvest your wallet.

What happens when government gives tax dollars to people who make bad decisions? Flood insurance is a good example. Flood insurance is not available in the private sector as part of the standard homeowners policy because people using their own money view flood risk as uninsurable. After a series of floods in the Mississippi basin in the 1960’s, the federal government created the National Flood Insurance Program to provide flood insurance to communities and homeowners. When the taxpayer takes on the flood risk, people are encouraged to continue building in flood prone areas. Gee Martha, it looks like a flood is on the way again. Don’t worry Billi-Bob, the government will give us a bucket for a bailout again.

Incidentally, according to the U.S. Government Accountability Office’s 2017 High Risk report: “Since the program offers rates that do not fully reflect the risk of flooding, NFIP’s overall rate-setting structure was not designed to be actuarially sound in the aggregate, nor was it intended to generate sufficient funds to fully cover all losses.” This is a lose-lose proposition.  

But you know what’s strange? Government didn’t always give money to people who made bad decisions. Imagine what might have happened had government given money to the horse and carriage sector back when the car was invented. As more and more people drove around in cars, fewer and fewer rode around in buggies. This meant buggy builders lost customers, stables didn’t need all those stallions, and harness makers either went out of business or started making car seat covers. Did government support buggy makers? No it didn’t and we don’t see buggies on the streets these days.

However, here in Wyoming, the Wyoming Business Council is in the business of keeping those metaphorical buggies on the road. It subsidizes businesses that can’t get cheap loans in the private sector, including farmers who don’t care about Wyoming’s cold and rainy winters. In fact, since 2000, the Wyoming Business Council has given out more than $5 million to a group of farmers including about 38 in a cooperative known as Wyoming Sugar. The WBC may now give an additional $6 million to these 38 farmers because the USDA, another government subsidy handout organization, declined to give them a federal handout.

But here’s a question few seem to have asked. If farmers hadn’t received payments in the past would they have moved on to other crops more suitable to rainy and cold winters?

Farmers can raise a lot by plowing. Yes, farming is an important activity and yes farmers are valuable members of society but do we want farmers and farming dependent on government welfare? I don’t think so.

Bankrupt Pension Plans Drive Businesses Out of the State – A Lesson for Wyoming

[This article was first published by Maureen Bader on December 22, 2011. And the amusing thing is that the Illinois policy group didn't make the Conference of Public Employees Retirement System's Naughty list.]

Illinois' government pension plan disaster provides a lesson for Wyoming. 

Companies were talking about leaving the state of Illinois. Chicago Mercantile Exchange and Sears’ corporate headquarters were among the companies looking to head to states farther away — from fiscal collapse that is. Indiana governor Mitch Daniels is busy promoting his state as a place with an attractive business climate. Wyoming is likely doing the same. However, Wyoming suffers from the same problem that is tanking the Illinois state budget – an unsustainable pension plan for bureaucrats.

Wyoming’s bureaucrats have it made – for now. When they retire, they’ve been promised a pension most people in the private sector can only dream about. Bureaucrats get a defined-benefit pension plan, one that pays a sum of money defined by the bureaucrat’s last five-year-average salary and the length of time in government, whether there is enough money in the pension fund or not.

Neither the Illinois nor the Wyoming pension plans have enough money to pay their promised benefits. Wyoming’s public sector pension plan is 84 per cent funded. That means, should it close down today, the government would have enough money to pay for 84 per cent of its promised benefits.

Technically, these types of funds are considered beyond recovery when they fall below 71 per cent funded. Illinois’ public sector pension plans are 51 per cent funded. Illinois’s pension plans do not have enough money to pay the promised benefits and are too far gone to recover.

The Illinois government is in a state of denial. Instead of reforming its pension plan it hiked corporate income tax rates from 7.3 per cent to 9.5 per cent and personal income tax rates from three per cent to five per cent to try to Band-Aid over the problem. These tax hikes were sold to businesses and individuals as a temporary tax measure, but with an aging bureaucrat population, the drag on the state’s budget will only get worse.

Businesses, not wanting to get stuck paying for politician’s unaffordable promises, responded by looking for greener pastures until the governor backed off and cut the tax hike. Of course, none of this changes the reality that Illinois’ pension plan is bankrupt so these cuts will likely only keep business in the state until the next budget crisis. 

Wyoming has no corporate or personal income tax so would be a good place for these companies to relocate to, on the surface. That’s because Wyoming’s bureaucrats enjoy the same type of pension plan as those in Illinois. Some Wyoming legislators have faced reality and a bill is heading to the Wyoming legislature to reform the Wyoming bureaucrat pension plan before the state has the same problems now sinking Illinois. But will enough Wyoming legislators take the necessary steps to reform the plan? All Wyoming legislators must face reality now and reform this pension plan.

These defined benefit pension plans are a relic of bygone times. That’s why almost all companies in the private sector have moved employees to the type of plan outlined in the new Wyoming bill — a defined contribution pension plan. In this type of plan, retirees’ pensions are determined by how well their investments did over time. The money is in an account a person owns and controls. People don’t depend on false promises and taxpayers aren’t on the hook to support pensions far grander than anything they could ever hope for.

Businesses and private-sector taxpayers, many who do not even have a pension, cannot be expected to fund the retirement bliss, even if illusory, of bureaucrats. As defined benefit plans become a bigger ball and chain on the economy, they drive taxes up which drives business out of the state. By empowering all people to control their own retirement future, Wyoming can avoid this fate.

Let’s not be Illinoyed!

Pension Reform – Time for a Reality Check

[This article was first published by Maureen Bader on October 13, 2014]

Introduction

Imagine living in a place where anyone can have anything they want by just wishing for it. If one wants a house, one imagines a house—and poof—it appears. But scarcity is the basis for an economic system, thus in a place with no scarcity, people have no needs. In a place where people have what looks like every material need by just wishing for it, they have no need to work, no need to cooperate with other people, and as a result, being naturally quarrelsome, people tend to live farther and farther apart.

Imagine a person living in this place deciding to do something about this situation. He decides he will go back to Earth where he can get real materials and bring them back to build real houses. That would create a community, bring people together and that would mean safety in numbers. 

Someone foreign to this place asks, “Safety from what?”

The man doesn’t answer.

Undeterred, the new person asks, "But if people can get a house by just imagining it, why would they want a real house?"

The logical fellow tilts his head and says, "To keep the rain out, for instance."

"These imaginary ones don’t?"

"Well of course not, how could they?"

“Then why build them?”

“For safety, or at least, the illusion of safety.”

Then a new person asks, "Just where are we?"

"We don’t have a name for it here," the would-be builder says, "but back on Earth, some people call it Hell."

So living in a place where you can have whatever you want, except it is not real, it is just an illusion. Worse still, a place where safety is just an illusion is not such a great place to be.

Pension Promises

Often, government promises create nothing but the illusion of safety. Pension promises are a good example. Government has promised to support government workers in their retirement, but because of the fundamental flaws in the government pension system, this promise is an illusion.

For example, one day the City of Central Falls in Rhode Island simply stopped sending pension checks to pensioners because its pension fund ran out of money. The same thing happened in Pritchard, Alabama even though state law required it to pay pension benefits in full.

Although in both cases, pensioners eventually started receiving at least part of their pension payments again, a retired fire marshal in Pritchard died while waiting for that pension check. Imagine being 89 years old, standing by your mailbox, waiting for a pension check that never arrives. That is not a very nice place to be.

When pension funds run out of money, there is no tree from which to pluck pension checks. And if you think this couldn’t happen in Wyoming, think again.

Wyoming provides the same type of pension promise to government workers that Central Falls and Pritchard do, and it suffers from the same fundamental flaws. In fact, Wyoming has a pension plan that will run out of money in about 15 years—Fireman Pension A. This is a closed plan with 292 members, and three current employees in who can retire at 75 percent of their final salary and receive a 3-percent compounded cost of living increase every year. Making this situation worse is that neither current employees nor the taxpayer contribute to the plan, and it is $68 million in the hole.

Speaking of the illusion of security, reform attempts are met with resistance by the very people who would be affected most direly should the system collapse. In the case of Fireman Pension A,  its representative objected to a joint Wyoming Liberty Group and Reason Foundation seminar which sought to solve Wyoming's looming pension debt problem.  Closing one’s eyes and ears to reality won’t change it.  

So how does Wyoming ensure pensioners are not left waiting at the mailbox and future taxpayers are not left with a massive pension debt? The first step is to get real.

Real Pension Reform

When we talk about pension reform, what are we talking about?

Let’s start with an overview of the principles of real pension reform.

First, we must understand that both government workers and taxpayers deserve a retirement system that places people on the path to retirement security and is fiscally sound, transparent and accountable. Legislators must establish a government sector retirement system that is affordable, sustainable and secure. With almost $2 billion in pension debt that won’t just go away, legislators must create a program that pays down this debt as quickly as possible. All this is good, but processes must also be established that ensure future legislators adequately fund retirement promises.

On Monday, former Utah state senator Dan Liljenquist described his experience reforming the pension system in his state. The Utah story is a good example for Wyoming because the state was not in crisis mode before the 2008 downturn. In fact, Utah’s pension system was 100 percent funded. After the market crash, it lost 22.3 percent of its value and leaders realized that without fundamental reform, more and more of the state’s general fund would go to pay down the pension debt, the debt would take years to grow out of, if ever, and should another downturn hit, they would be in an even worse position.

It was time for fundamental reform.

This meant putting new employees into a different type of plan, one that lowered contribution costs and protected taxpayers from market downturns. Utah closed the existing defined benefit program to new employees, taxpayer contributions to the new retirement program were capped by statute at 10 percent of base salary, and new employees had a choice between a straight 401(k) plan or a hybrid plan.

While new employees and taxpayers would still be on the hook to pay down the pension debt created under the old system, the cost of the retirement system for new employees was less than half that of the old, meaning that as the current program came to its end (as retired employees died), resources would be freed up for other programs.

The key for Utah was to gradually reduce pension-related bankruptcy risk until that risk is eliminated.

This is the direction Wyoming must take so pensioners have a pension once they retire and taxpayers are not left with a legacy of debt and higher taxes.