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CBO: State and Local Government Pension Liabilities Could Be $3 Trillion

Mike Klein

Another voice chimed in this week on the unhealthy status of America’s public pensions.  The Congressional Budget Office wrote, “The recent financial crisis and economic recession have left many states and localities with extraordinary difficulties for the next few years, but structural shortfalls in their pension plans pose a problem that is likely to endure much longer.”

The Congressional Budget Office is the federal agency mandated to provide nonpartisan analysis to the U.S. Senate and House budget committees.  CBO also creates an independent re-estimate of White House federal budget proposals.  It regularly studies issues like pensions.

CBO analyzed the Public Fund Survey of 126 state and local government pension plans and it reported those plans held $2.6 trillion in assets in 2009 compared to $3.3 trillion in future pension payment liabilities.  The result would be a $0.7 trillion unfunded liability which the Congressional Budget Office said was the lowest percentage asset level in two decades.

Congressional Budget Office Report Illustration

CBO Director Douglas Elmendorf explained the actual problem is more serious in his note that was attached to “The Underfunding of State and Local Pension Plans.”  Elmendorf wrote:

“The reported amount of underfunding varies significantly depending on the approach used to calculate assets and liabilities.  The estimate of unfunded liabilities cited above — $0.7 trillion – is calculated based on the actuarial guidelines currently followed by state and local governments.  Under those guidelines, actuaries compute liabilities by discounting future benefit payments using a discount rate based on the expected rate of return on the plans’ assets.

“An alternative method, the so-called fair-value approach, aims to measure the market value of assets and liabilities.  It more fully accounts for the costs that pension obligations pose for taxpayers by discounting future cash flow rates at a rate that reflects their risk characteristics.  Because the future cash flows associated with accrued pension liabilities are fixed and carry little risk, the discount rate used under this approach is lower than under actuarial guidelines.  That approach yields a much larger estimate of unfunded liabilities for those plans in 2009 – between $2 trillion and $3 trillion.”

Pension fund assets are further impacted by total years of service and salary levels at retirement, how long pensioners are projected to live and cost-of-living adjustments.  They also are affected by pension plan changes as governments move from defined benefit pensions based on service years and salary to 401k-style pensions in which employees make contributions to funds they manage and employers provide some matching funds.

The Pew Center on the States released a similar report on April 26.  Pew estimated that states had a $1.26 trillion unfunded liability in pension and retiree health care accounts.  Click here for the Congressional Budget Office report.  Click here for the Pew Center on the States report.  The idea to take away from all these numbers is that pension funds are in deep water.

(Mike Klein is Editor at the Georgia Public Policy Foundation)

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May 6, 2011 Posted by | Uncategorized | , , , , | Leave a comment

Georgia Public – Private Partners Launch Internet Shipping Marketplace

Mike Klein

The next big thing in logistics (that means moving stuff from one place to another) might already have happened right here in Georgia.  Georgiafreight.com is a coordinated marketplace of transportation options for moving anything from here to there or almost anywhere.

It exists entirely on the Internet, it’s easy to use (even I was able to understand it) and here’s the best news yet, it comes with a whole bunch of built-in discounts. You can get discounts for being a Georgia company and for shipping from one Georgia address to another.

Georgiafreight.com is a project of Efreightsolutions, a private company, but it was hatched with lots of assistance from the Georgia Center of Innovation for Logistics which is headquartered on the Georgia Tech campus in Savannah.  It received a big boost forward from Kennesaw State University president Dan Papp who connected Efreightsolutions and the Innovations Center.

“It’s an online freight portal and there are lots of them out there, but what was lacking was a focus on Georgia,” said Page Siplon, director of the state’s Center of Innovation for Logistics.  This online model provides several tiers of service and lots of options for moving product by air, rail, truck or water.  Siplon said the model could soon be expanded to California and New York.

The Georgiafreight.com story will be center stage when the 2011 Georgia Logistics Summit convenes over two days next week at the Cobb Galleria Centre in Atlanta.  But the company’s ability to help industries move products will be just one reason that it makes headlines.

Using its own private funds, Georgiafreight.com will make program awards to five Georgia universities that offer logistics education.  Siplon said the company will also announce an inaugural Logistics and Community Leadership Award to a person (or persons) for work within the industry and dedication to foster care programs.  University and personal award recipients will be honored during Monday evening’s reception at the Cobb Galleria Centre.

Page Siplon

Next Tuesday’s daylong third annual Georgia Logistics Summit is rapidly becoming a must-attend event for private industry and public stakeholders.  Siplon launched the event as a 2009 luncheon and 450 attended.  “We knew we were onto something,” Siplon said.  Last year it moved to the Cobb Galleria and attendance doubled.  Some 1,200 are registered for Tuesday.

The entire reason the conference exists is to explain how Georgia can move products.  “It’s a complicated industry so when you say logistics, a lot of things come to mind,” Siplon said.  “What was lacking was a place where all those people could get together and talk.”

Tuesday scheduled keynote speakers include Jack Wells, chief economist for the U.S. Department of Transportation.  Wells will meet with Georgia Ports Authority executives on Monday in Savannah before his conference address on Tuesday in Atlanta.

The Savannah River and harbor deepening project remains the biggest elephant in the room. Georgia needs to dredge the river from its current 42-foot depth to 48 feet to accommodate larger ships that will begin to navigate the new Panama Canal in three years.  Project cost is estimated at $500-to-$600 million, to be shared between Georgia and the federal government.

Georgia has already committed its share of about 25 percent, but Washington has not followed suit.  “Yes, that is probably the most visible project because it affects so many things,” Siplon said.  “It is a project we are going to have to fund one way or another.  Georgia is at the crossroads of global commerce.  We shouldn’t have to beg for resources to do that.”

Here is a video about the economic impact of the Georgia ports in Savannah and Brunswick.

Tuesday’s conference will include breakout sessions on air freight, agribusiness, energy, life sciences, manufacturing and ocean freight.  Other scheduled speakers include Governor Nathan Deal, Atlanta Mayor Kasim Reed, Georgia Ports Authority executive director Curtis Foltz, state economic development commissioner Chris Cummiskey, state transportation commissioner Vance Smith and logistics industry executives.

Click here to learn more about the Georgia Center of Innovation for Logistics.

(Mike Klein is Editor at the Georgia Public Policy Foundation)

May 6, 2011 Posted by | Uncategorized | , , , , , , , , , , , , , , | Leave a comment

U.S. Takes Out Murderer Osama bin Laden: “A Great Day For the U.S.”

Mike Klein

Georgia’s United States senators, Governor Nathan Deal and the state’s thirteen congressmen were united in praise on Monday for the U.S. military hit that killed Osama bin Laden.   Congressman Austin Scott released a YouTube video that you can watch here.  Congressman David Scott issued a succinct statement on Facebook: “A great day for the U.S.”

Osama bin Laden masterminded the September 11, 2001 attack against the United States, along with many other incidents during two decades of terrorist violence. Bin Laden was shot in the head and killed when U.S. forces stormed his compound in Pakistan.  President Barack Obama announced the successful hit on bin Laden during a late Sunday evening live broadcast from the White House.

Governor Nathan Deal:
“We celebrate this victory against an embodiment of evil, and we remember and mourn the thousands of innocents who died at the hands of this murderer. Today, our great nation showed once again that we will stop at nothing to defeat those who threaten our people with terrorism.”

Senator Saxby Chambliss:
“This is a historic moment for the U.S. special operations and intelligence communities. I highly commend the special operations units who undertook this mission and carried it out. The CIA and others in the U.S. intelligence community did a phenomenal job over several months in carrying out this assignment.”  An early version of the Chambliss statement said there were no injuries to women and children; that part was retracted after U.S. officials said one woman who was being used as a human shield was killed.

Senator Johnny Isakson:
“This is an historic moment that brings to a close an unfortunate chapter in American history. This day comes as a result of the hard work by the Central Intelligence Agency, the national security agencies and especially our military. We have hunted down and killed the mastermind of the 9/11 attacks, but we must not stop here. The threat of terrorism still exists and we must remain steadfast in our mission to eradicate it around the globe.”

Congressman Jack Kingston (1st):
“What happens in the Hereafter to a man whose life caused the death of so many innocent people is left up to God.  Our job is to continue the fight against terrorism which he – on tragic day – raised to the highest level.  “His legacy in America is more government security, more check points, less personal freedom, more war and an end to our relative isolation and peace as we knew it.  While the world is better off without him, his hatred lives on in his followers and we must remain ever vigilant on their next move.”

Congressman Sanford Bishop (2nd):
“We all remember where we were on September 11th when Al Qaeda attacked our country, but today we have finally brought the mastermind of those terrorist attacks to justice. I congratulate President Obama, our military and the intelligence community for conducting a successful mission to kill Osama Bin Laden in Pakistan. While this is a great moment in the war on terror, the threat from those who wish to harm our country will continue, and we must remain vigilant.”

Congressman Lynn Westmoreland (3rd):
“Today is a great day for America.  After years of searching for the terrorist behind the most massive strike on American soil since World War II, we have finally killed Osama Bin Laden.  This is a huge victory for our troops and I would like to personally thank them for all they have done for us.  This historic victory is also due to our Intelligence Community and all of our international partners in the War on Terror.  Without their work and support, we would never have been able to achieve this.  The backbone of al-Qaeda is no more.”

Congressman Hank Johnson (4th):
“This victory in the ongoing fight against violent extremism shows the resolve of the American people and the leadership of President Obama. We are grateful to U.S. intelligence personnel and military forces who carried out this essential mission and brought Osama bin Laden to justice.”

Congressman John Lewis (5th):
“I am not one to rejoice in the death of any person, but Osama bin Laden took the lives of thousands of innocent people in this country and around the world.   He committed heinous crimes that ended the hopes and dreams of many courageous public servants … Many people left home for work that day never to return. Today thousands of families are missing their fathers and mothers, sons and daughters due to the violence this man fomented and supported.  His terrorism changed not only individual lives, but it promoted an environment of fear and the need for ever-ready security to assure the defense of this nation and others around the world.”  (Edited for Length)

Congressman Tom Price (6th):
“Confirmation of the death of Osama bin Laden is welcome news to freedom loving people around the globe. Evil has met justice. The brave men and women of our military forces and intelligence services are to be commended for their defense of our liberty and freedom.  May God Bless America.”

Congressman Rob Woodall (7th):
“The news that Osama bin Laden has been located and killed by U.S. troops is uplifting and sobering at the same time.  We all remember where we were and what we were doing when the hijacked planes crashed on American soil.  We will all now remember where we were and what we were doing when the President of the United States announced that the man with the blood of more than 3,000 Americans on his hands is no longer a threat to America.  My thoughts and prayers are with the families of the victims of the September 11 attacks, for the soldiers overseas who are still working to keep our homeland safe, and the families that wait so patiently for their return.”

Congressman Austin Scott (8th):

Congressman Tom Graves (9th):
“For the victims of 9/11, U.S.S. Cole, the American embassies in Kenya and Tanzania, and countless other terror attacks across the globe, justice has finally been brought to the chief perpetrator of those evils, Osama bin Laden.  Not only is this a great day for America, but also for all in the world who cherish freedom and democracy … May God bless our fighting men and women, their families, and all who continue the work of bringing justice to those who have attacked or threaten terror against the United States.” (Edited for Length)

Congressman Paul Broun (10th):
“I am elated to learn that Osama bin Laden, an enemy with so much blood on his hands, has finally been brought to justice.  I congratulate our brave men and women in uniform who fought tirelessly to secure this victory, and I encourage all Americans to remember those who paid the ultimate price while fighting the War on Terror. We will forever be grateful. I also commend President Barack Obama, our Commander in Chief, for authorizing this strategic operation, as well as President Bush for initially launching our counterattack after the tragic events of September 11th, 2001.” (Edited for Length)

Congressman Phil Gingrey (11th):
“The death of the terror mastermind, Osama bin Laden, is a victory for Americans and all those who believe in the principles of freedom and justice. The horrific attacks on our nation on September 11, 2001 began a relentless pursuit for the death or capture of bin Laden. This news proves that – no matter how long it takes – we will not rest until those who kill Americans have been brought to justice.”  (Edited for Length)

Congressman John Barrow (12th):  
“This is a true victory for our country, and it shows that Americans are committed to fighting terrorism wherever it hides, and for however long it takes.  Our military leaders, intelligence community, and brave men and women who executed the raid that killed bin Laden special commendation today.  These folks have never wavered in their commitment to our country, and our entire nation is grateful for their service.  Anyone who attacks America needs to know that our people and our country will not rest until justice is done.”

Congressman David Scott (13th)
“A great day for the U.S.”

Quotes were compiled from official websites and statements to news organizations.

(Mike Klein is Editor at the Georgia Public Policy Foundation)

May 2, 2011 Posted by | Uncategorized | , , , , , , , , , , , , , , , , , , | Leave a comment

Four Terrific Videos Show Learning is Viral, Mobile, Interactive, Independent

Mike Klein

Ask anyone from the baby boomer generation about our youthful learning and you will likely find a common thread:  Learning took place in a classroom where we listened to teachers and recited things we read in books.  Success was measured by how much we could regurgitate.

Today learning is viral and mobile.  It is interactive and independent.  Clunky books are losing ground to online lessons.  Success is often the ability to use deductive reasoning to establish the relationship between facts.  The teacher might be online.  Classmates might also be there.

The internet contains many examples of this new style learning.  We found a few that really illuminate what is possible in modern learning.  Here you will be introduced to Georgia students whose learning literally takes them around the world, and to Cartersville students who use the Georgia Virtual School credit recovery project.  And there is so much more.

Have you seen a great education video?  Tell us and we will pass it along.  My Georgia Public Policy Foundation mail address is mikeklein@gppf.org.  Get in touch.  Now, here are some terrific learning video resources:

Flat Classroom Conference: A Vision of the Future

Georgia educator Vicki Davis and her partner Julie Lindsay brought students from Georgia and around the world to Qatar for the 2009 Flat Classroom Conference.  This video is their story.  Conferences were held in Mumbai, India in 2010 and Beijing, China in 2011.

Georgia Virtual School Credit Recovery

Georgia Virtual School is the state Department of Education’s online learning project that is available to high school students statewide.  Credit Recovery is online learning for students who need to repeat a course they initially failed in a traditional classroom.  This video introduces you to GAVS credit recovery students at Woodland High School in Cartersville.

Online Learning: A Terrific Alternative for Parents

Author John Watson and Chicago Virtual Charter School founder Sharon Hayes explain why some students achieve better results with online learning than inside traditional classrooms. Hayes is a former principal in Chicago city and suburban area high schools.  We also hear from Pennsylvania parent Linda Dupes whose children participate in an online charter school.\

Virtual Learning: A Day in the Life of the Brems Family

Meet John, Ellie and Emma Brems and their parents Mindy and Bob.  The kids are Connections Academy students.  One room in their house is their classroom-at-home.  Here is a real world example of one family’s successful interaction with online learning.  Connections Academy will offer courses to Georgia students beginning this fall.

(Mike Klein is Editor at the Georgia Public Policy Foundation)

May 2, 2011 Posted by | Uncategorized | , , , , , , , | Leave a comment