Pensions, Prisons and Prognostications: The August 2013 State Net® Capitol Journal in Review

Posted on 08-28-2013 by
Tags: Real Law

Brought to you by the Real Law Editorial Team

Fortune tellers have a colorful variety of means at their disposal. Wikipedia®, for example, lists several dozen common methods used for predicting the future. They range from alectromancy (observation of a rooster pecking at grain) to the more familiar tasseography (studying tea leaves or coffee grounds).

Of course, clairvoyance (from the French clair meaning “clear” and voyance meaning “vision”) is included in the online encyclopedia’s article. So, too, are gastromancy (stomach-based ventriloquism) and pendulum reading (inferring events by the movements of a suspended object).

The latter method might be worth resorting to at times for those in the habit of observing the back-and-forth deliberations of lawmakers across the country. Or, as wizards do in fairy tales and legends, one could simply resort to the time-tested application known as scrying (gazing into a crystal ball) to predict a likely result.

As usual, looking ahead and assessing the outcome or implications of state and federal legislative activity was very much on the minds of the State Net® Capitol Journal editors in August. Readers will be pleased to know those editors used far more reliable means to reach their informed opinions about various subjects of interest.

Pension Peril

Capitol Journal editorial advisor Lou Cannon capped the month with an in-depth look at how Detroit, which recently declared bankruptcy, mirrors scores of other U.S. cities and states “buried under mountains of pension debt.” In the top story for the August 19 edition, Cannon notes: “Chicago is in especially perilous shape. The Windy City has attracted business and reduced its horrific crime rate…but the pension fund for retired teachers is near collapse, and four other funds for retired city workers are $19.5 billion short. Overall, Chicago has funded just 36 percent of its pension obligations. Philadelphia, using 2011 figures, has funded just 50 percent.”

As Cannon explains, looming larger than municipal missteps that threaten the solvency of cities and states are unfunded pension liabilities totaling an estimated $2.7 trillion—a figure that represents 17 percent of the country’s gross domestic product. “The states themselves say their pensions are 73 percent funded,” Cannon adds, “but the ratings agency Moody’s says this considerably understates the magnitude of the problem.” According to Cannon, Moody’s own calculations found that states have set aside just 48 cents for every dollar in pensions they have promised and have distorted pension numbers by failing to take proper account of market risks.

Cannon delves into various reasons behind the funding shortfalls (unions, the handiest scapegoat for those who deplore the pension mess, are not entirely to blame; in fact, a principal reason that pensions are underfunded is that “Americans are living longer, which makes pension promises much costlier to keep”). He also explores various proposals to deal with the issue and examines the likelihood of a resolution that’s so urgently needed.

Indeed, one doesn’t need a spirit board or tarot cards to recognize the potential toll of continuing pension exposure. It’s there to see in the shadow of Detroit.

Prison Blues

For his part, Capitol Journal editor Rich Ehisen was off by only a matter of hours in a reasoned prediction leading the top story of the August 5 edition.

“Any day now,” Ehisen wrote, “perhaps even as you are reading this, U.S. Supreme Court Justice Anthony Kennedy will decide whether to grant California Gov. Jerry Brown’s (D) request to block an order by a three-judge U.S. District Court panel to cull over 9,000 prisoners from the state’s chronically overcrowded prisons.”

In fact, the highly anticipated ruling was handed down as the Capitol Journal went to distribution the previous Friday. The court rejected Gov. Brown’s bid in a surprising 6-3 decision. Justice Antonin Scalia penned a sharply worded dissent, which was also signed by Justice Clarence Thomas. Justice Samuel Alito joined the minority, but he did not add his signature.

The decision was the latest in a long series of rulings on California’s prisons and a setback for Gov. Brown. In view of that, Ehisen offers a perspective of events leading to the decision and, in his words, what makes the governor’s “reaction to the state’s ongoing prison mess so puzzling.”

Of course, Gov. Brown has a storied past in the Golden State. In his current term, he’s garnered almost universal praise and voter support for steering California through turbulent times. “They don’t call me Moonbeam any more,” he’s been quoted as saying, referencing an old and uncomfortable moniker once given to him by a Chicago newspaper columnist. “We cut pensions, the equivalent of social security, we cut healthcare, childcare…we had a tax [ballot measure] and everyone said, that’s not going to pass—and it passes! We’re getting things done. We’re building the foundation for a renewed California,” Brown has insisted.

All that merely serves to further confound observers of Brown’s stance on the state’s prisons, the conditions of which are now grabbing headlines for escalating hunger strikes among the inmates and court orders supporting forced-feeding of prisoners.

Heat Check

Between prognostications about pensions and prisons, the mid-month August 12 edition of Capitol Journal offered a mid-year review of issues that were expected to play out prominently in 2013. As associate editor Korey Clark notes, “some of those issues have cooled off a bit, while others have grown even hotter.”

That sounds like a professional fortune teller’s pre-emptive prevarication, but in this case it’s true.

Clark provides a lively summary of a variety of issues and their current status, from legislation regarding health insurance exchanges to fracking, social media, pharmacy oversight, Internet gambling, voter ID, same-sex marriage (one of the year’s big winners, so far), union rights, employee credit checks, Internet sales taxes, gun control and more.

If nothing else, Clark’s review confirms the importance of keeping an eye on state and federal legislation and their attendant regulations. It’s a worthwhile, four-minute read.

News and Views from the 50 States

There’s more that fills each weekly edition of Capitol Journal. It’s all compiled by the expert State Net editorial staff and freely available on the State Net website or in various formats via email.

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