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Letters to the Editor

KPERS facts

October 2, 2009

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To the editor:

I write in response to the Sept. 28 story titled “KPERS report sparks war of words.” Reporter Scott Rothschild tried to tarnish the substance of the report because its author is associated with Colorado’s TABOR and Americans for Prosperity. AfP is unpopular with pro-big-government interests, and TABOR-like measures that constrain tax increases are threats to the tax-and-spenders.

Let’s focus on the facts: KPERS has been woefully underfunded. It’s not bankrupt in the sense that today’s benefits cannot be paid from current fund balances, but it is structurally unsound in that the state would have to commit more than $8 billion to KPERS today to cover future promised benefits. For comparison’s sake, total state receipts for FY 2010 are currently projected at $5.5 billion.

For KPERS to be financially sound, the state would have to defund everything in the budget for 18 months — K-12, higher ed, transportation, social services, etc. — just to pay into KPERS. Alternatively, the state would have to commit about $700 million each year for the next 20 years in order to make up the pension shortfall. That $700 million per year figure is on the same order of magnitude as the revenue shortfalls that have led to the current budget “crisis.” Does that sound serious? Of course it does. Get a clue, Rothschild, KPERS suffers from real problems due to obfuscation and financial neglect by Kansas leaders.

Finally, J-W editors, please put Rothschild’s thinly disguised opinion pieces on the op-ed pages where they belong.

Comments

Richard Heckler 5 years ago

TABOR is quite an unstable economic policy as is Club for Growth which in effect is a clone developed by a Brownback chief of staff. The Kansas Chamber of Commerce also subscribes to this viewpoint. Notice the how "economic growth" in Kansas has suffered over the past 20 years. This what Senator Sam Brownback would bring to the office of Governor = economic disaster.

Constantly removing revenue sources from the cookie jars has done nothing for economic growth in the state of Kansas,ruins a fine public school system and is in the process of screwing hard working people.

This TABOR thinking is simply a child of Reaganomics which in and of itself has wrecked the USA economy. Reaganomic thinking is better known as Wreckanomics for example:

Beware: TABOR Is Coming After devastating government services in Colorado, the "Taxpayer Bill of Rights" threatens to spread.

BY MICHAEL REBNE

This article is from the July/August 2005 issue of Dollars and Sense: The Magazine of Economic Justice available at http://www.dollarsandsense.org/archives/2005/0705rebne.html

In 1992, after tireless nagging by Grover Norquist and his minions at Americans for Tax Reform, Colorado voters amended the state constitution to strictly limit the government's ability to raise revenue. The Taxpayer Bill of Rights, or TABOR, has forced Colorado to spend the last 13 years writing mandatory rebate checks to taxpayers, while vital education and human-service programs have been nearly choked to death.

According to David Bradley and Nicholas Johnson at the Center on Budget and Policy Priorities (CBPP), for example, "between 1991 and 2003--a period in which the percentage of children who are uninsured declined nationally--the proportion of low-income children who lack health insurance in Colorado rose from 15% to 27%. Colorado now ranks 48th in its level of taxpayer support of colleges and universities, down from 35th in 1992."

Despite the pain TABOR has caused in Colorado, some 23 states were facing similar initiatives at the close of 2004. But Norquist's drive shows signs of floundering. "For businesses to be successful you need roads and you need higher education, both of which have gotten worse under TABOR and will continue to get worse," Tom Clark of the Denver Metro Chamber of Commerce told the Washington Monthly. "I'm a Republican," Clark said, "but I made the decision not to give any money to the state party."

Likewise, Colorado Governor Bill Owens is having trouble garnering support from his own party's legislators, most of whom know their constituents no longer believe TABOR is a good thing. The anti-TABOR movement, meanwhile, continues to gain momentum, as the story of Colorado's misery begins to spread nationally.

Funded by the Right ( con't) "Beware: TABOR Is Coming" http://www.dollarsandsense.org/archives/2005/0705rebne.html

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Richard Heckler 5 years ago

If bad economic policy were the gem for creating new sound economic growth and a never ending source of excellent paying jobs Kansas Republicans and Lawrence,Kansas would be receiving Oscars. That of course is not happening.

Fund KPERS and leave peoples retirement programs alone.

Workers signed on with this program in good faith for a reason: http://www.kpers.org/benefitskpers.htm

TABOR/Reaganomics - Wreckanomic thinkers have some history under their belts for their ability to devastate the nations economy and millions upon millions upon millions of retirement programs throwing golden agers back into a very very lean job market.

What has done such appalling damage to the nations economy and virtually wiped out millions upon millions of retirement programs?

Meet Wreckanomics

  1. The Reagan/ Bush Home Loan Scandal http://rationalrevolution0.tripod.com/war/bush_family_and_the_s.htm

  2. The Bush/Cheney Home Loan Scandal http://www.dollarsandsense.org/archives/2009/0709macewan.html

  3. What did Bush and Henry Paulson do with the bail out money? http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year

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BigPrune 5 years ago

Sounds like KPERS sucks.

Merrill and his "progressive" people devastated Lawrence's economy. Why should we read your cut and paste?

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Richard Heckler 5 years ago

The millions upon millions upon millions who have been victimized as a result of Wreckanomics are quite thankful Social Security Insurance and Medicare Insurance were there after politicians destroyed their retirement plans.

So when politicians start talking about moving Social Security into a Wall Street type investment the reply should be NO WAY JOSE'.

What to remember?

*What impact would a Wall Street plan have on the national debt?

Unless taxes are raised, the government(taxpayers) would have to borrow up to $4 trillion over the next 20 years to make up the money that is drained out of the system by private accounts. Social Security privatization will raise the size of the government's deficit to nearly $700 billion per year for the next 20 years, almost tripling the size of the national debt.

*How will the rest of the U.S. economy be affected if the president's plan is enacted?

Put simply, moving to a system of private accounts would not only put retirement income at risk--it would likely put the entire economy at risk.

*The current Social Security system generates powerful, economy-stimulating multiplier effects. This was part of its original intent. In the early 1930s, the vast majority of the elderly were poor. While they were working, they could not afford to both save for retirement and put food on the table, and most had no employer pension. When Social Security began, elders spent every penny of that income. In turn, each dollar they spent was spent again by the people and businesses from whom they had bought things. In much the same way, every dollar that goes out in pensions today creates about 2.5 times as much total income. If the move to private accounts reduces elders' spending levels, as almost all analysts predict, that reduction in spending will have an even larger impact on slowing economic growth.

*The current Social Security system also reduces the income disparity between the rich and the poor. Private accounts would increase inequality--and increased inequality hinders economic growth. For example, a 1994 World Bank study of 25 countries demonstrated that as income inequality rises, productivity growth is reduced. Market economies can fall apart completely if the level of inequality becomes too extreme. The rapid increase in income inequality that occurred in the 1920s was one of the causes of the Great Depression.

http://www.dollarsandsense.org/archives/2005/0505orr.html

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Richard Heckler 5 years ago

How reliable is Wall Street? If one can affiord to lose money it doesn't matter?

Could you afford to gamble and/or lose your Social Security Insurance? Social Security is an excellent supplement for those who are not wealthy which is about 95% of the USA. The middle class is the one that is shrinking.......... not for the better.

Does one want to wait until the stock market bounces back before retiring? That could be a long time.

Remember this:

*During the 20th century, there were several periods lasting more than 10 years where the return on stocks was negative. After the Dow Jones stock index went down by over 75% between 1929 and 1933, the Dow did not return to its 1929 level until 1953(24 years later). In claiming that the rate of return on a stock investment is guaranteed to be greater than the return on any other asset would be a lie.

*Until 1984, the trust fund was "pay-as-you-go," meaning current benefits were paid using current tax revenues. In 1984, Congress raised payroll taxes to prepare for the retirement of the baby boom generation. As a result, the Social Security trust fund, which holds government bonds as assets, has been growing. When the baby boomers retire, these bonds will be sold to help pay their retirement benefits.

*If the trust fund went to zero, Social Security would simply revert to pay-as-you-go. It would continue to pay benefits using (then-current) tax revenues, and in doing so, it would be able to cover about 70% of promised benefit levels. According to analysis by the Center for Economic and Policy Research, a 70% benefit level then would actually be higher than 2005 benefit levels in constant dollars (because of wage adjustments). In other words, retirees would be taking home more in real terms than today's retirees do. The system won't be bankrupt in any sense.

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Richard Heckler 5 years ago

The Chamber and the builders/real estate community have been controlling Lawrence government for the past 25 years.

KPERS is an excellent program. It is no wonder many many signed on.

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trinity 5 years ago

" is an excellent program. It is no wonder many many signed on."

we did not have a choice of whether or not to "sign on" to KPERS.

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Godot 5 years ago

Shewmon, if you want the truth, stop reading the Journal World. This is a political/entertainment rag. Nothing more.

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deputyfife 5 years ago

Tom,

You are out of touch if you think LJW is a leftist newspaper. In fact, didn't they even endorse the Mccain-Palin ticket, wow there's some elite liberal media for you.

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jafs 5 years ago

Tom,

What makes you think that conservative news sources are unbiased?

They are simply biased in ways you find more palatable.

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