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Pension Liability Grows Drip By Drip

We looked at the cost that pension loopholes and gaming impose on the Commonwealth. Our report concludes that at least $3b of the $13b unfunded pension liability comes from these practices. The creation of these loopholes happens on a regular basis and here’s a small example that came up in today’s legislative session — House Bill 4024, which allows six individuals to receive credit in the Cambridge Retirement System ($108m unfunded liability as of 2006) for time they spent as mid-wives at Cambridge Health Alliance. To be clear, I’m a big fan of mid-wives and I’m not sure what the Cambridge Health Alliance is (non-profit? municipal entity? other?). But the point is — the rules of the game should not […]

A Refreshing Start

The Globe’s Thursday editorial on the start of the new school year in Boston has an interesting comment from the new superintendent: Her attitude toward independent charter schools is instructive. Unions and school boards resent the competition. She doesn’t. “The monopoly is over,” says Johnson. “We have to earn the right to serve the kids next door.”

Massachusetts and the Copernican Principle

In rough terms, the Copernican Principle states that we should assume we are not special (i.e. the universe does not revolve around us). So why does Massachusetts think it’s so exceptional? Three examples: Auto Insurance — 49 other states have some form of managed competition. Why can’t we? I don’t pretend to know the ins and outs of the recently proposed reforms (start here and follow the links on the third page for the details). But how about this for a test — What do we have to do to get Geico, Progressive, and Allstate to offer car insurance in this state? Police Details — This is an old story worth repeating — 49 other states use paid flaggers on […]

Quo Vadis?

Ross Gittell in the New England Journal of Higher Education/Summer 2007 edition (“Demographic Demise”) neatly summarizes why the New England region should be concerned about future growth. The data on our inability to recruit and retain the 25-34 cohort is pretty dramatic. Overall, New England’s population grew by only eight percent—far less than the national average of 18 percent. Yes, but we get quality and energetic, bright young workers, right? Wrong. Even granting the ballooning of the baby boomer population, and therefore a seven percent decline in the 25-34 year old set nationwide, Gittell notes that “most alarming” is that the 25-34 set declined by about 25 percent in New England over the 15-year period. All NE states were in […]

As if reading my mind. . .

The Boston Globe led today with Property tax bills soar as services fall. According to the story’s author, Matt Carroll, the average annual property tax bill for a single-family home in Massachusetts has climbed 50% in just the last seven years. To make it worse, the increases are not used to expand services, but go instead toward fixed costs – pension and other post-employment benefits for retired and retiring public workers, particularly healthcare, whose costs are quickly escalating beyond the ability of cities and towns to pay for them. Is it any wonder that voters, already facing such large increases on their tax bills, are casting an increasingly jaundiced eye on Prop 2 1/2 overrides? (See my post on Dartmouth’s […]