State Employees' Pensions at Risk
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Transportation Update - Toll Roads
Pro and Con
There is no doubt North Carolina has serious highway problems and that the problems in Union County are even worse than in most other parts of the state. And while I believe a great deal of highway money has been poorly managed, once it is spent, it is gone. There is no way to recover the funds.
In recognition of our immense maintenance needs due to putting off needed work far too long, as well as the need for new construction, I was willing to consider temporary tolls to fund new construction in order to accelerate the construction (Pro). Because of my interest in accelerating road construction, I was even lucky enough to be named to the toll road subcommittee.
Unfortunately, while I enjoyed working with the members of the committee, I concluded that the goals of DOT were incompatible with the needs of the people I represent and I had to vote against the bill. DOT seems to be looking for a massive new highway tax without making any serious changes in their current practices (Con).
The bill creates a new board to deal only with toll roads, but the board appears to be nothing more than window dressing to hide the new taxes. There is no effective limit on the amount of toll revenue that can be sucked out of one part of the state and sent to any other part of the state by the board (Con). There is no limit placed on the amount of tolls that can be charged (Con).
In essence, passage of the bill would establish a new appointed body and give them the power to raise taxes without any further action on the part of the General Assembly. It would then permit the funds raised to be spent anywhere in the state.
Since I represent a county that has been shortchanged on highway funding for years, I can't support a bill that would permit the transfer of funds out of my county to continue. Ironically, any area with a need for toll roads to accelerate construction is at great risk of becoming a permanent cash cow to generate funds for transfer to areas with less demand for tolls. The safeguards against this are totally inadequate.
The Name Game
Trying to Trick the Public
Shakespeare said "A rose by any other name would smell as sweet." Apparently the Democrat leaders in the NC House believe that North Carolina voters are a lot dumber than the average citizen in Shakespeare's time. They think calling a massive tax increase an education bill will trick the public into belie ving the money will go to education. I think the public will catch on to the trick.
Given the press reports, if I didn't know better, I might believe House Bill 231, the so-called "Education Revenue Act," had something to do with education. But while the House Finance Committee met on the 5th floor to pass the "Education Revenue Act," I was stuck in an Appropriations Committee meeting on the 6th floor where the money being raised by the Act was being given away.
I invite you to go to the General Assembly web site at www.ncleg.net and look at the House Calendar for August 23. You will see that, at the very same time finance met, the Appropriations Committee met to spend money on bills that had nothing to do wit h education.
Appropriations committee members voted to give a tax credit to anyone who increased their shipments through NC Ports. The committee voted to increase future spending by $129,000,000 to make sewer grants to selected communities. The committee probably would have voted to give funds to promote ethanol, but we didn't get to the bill. Did any of this spending have anything to do with education? Of course not.
Did the major media report the irony of the two meetings, at the same time and almost the same place, just on different floors? Of course not.
If the public knew what was going on, how could they be persuaded we need to raise taxes to fund "essential services" when so many nonessentials are being funded?
State Employees' Pensions At Risk
Pass It On
Should the State Treasurer be permitted to shift up to 5% of state employee retirement funds into "alternative investments?" According to the Treasurer, this is a great idea. According to the investment advisers who want to handle the investments (and receive commissions for doing so) this is a great idea. According to the Senate Finance committee, which overwhelmingly approved the plan last week, this is a great idea. But has anyone warned the state employees of what is being proposed?
Parts of the plan are fine, but one thing should give people pause about the alternative investment piece. The proposed investments are unregulated and there is no mechanism in place to inform the employees how their money is being invested. We're supposed to just trust the "process."
Privately managed pension funds are extensively regulated to protect those who depend on the funds for their retirement. Are state employees less deserving of protection?
For several months the Treasurer avoided my questions concerning the extent of the market losses incurred by the funds he manages. He finally provided the requested information when asked by a reporter, and the reporters' article revealed the fact that the fund had lost over $5 billion since the prior June.
I have yet to see an article reporting the fact that, for the first time, the Treasurer's managed funds reported a net loss overall for the last fiscal year. Nor has there been any mention of the fact that, on a percentage basis, the loss in the "alternative investments" was far greater than the loss in bonds or regular equity investments.
I've wasted a good deal of time this session trying, to no avail, to get the Treasurer to give me the same information any mutual fund would be required to furnish investors. I've been insulted and stonewalled. My fellow CPA, Senator Hugh Webster, has received the same treatment. This should be a warning. The "process" has severe problems.
State Employees Shorted
Democrats Do It Again
Did you know that, with the support of the Republican caucus, Art Pope attempted to amend the House budget to give state employees a larger raise by reallocating funds being spent for less important items? Did you know Democrat House Speaker Jim Black would not even permit discussion of the amendment or a vote on it? Did you hear the rumor that the House Democrat leaders had promised the Senate Democrat leaders not to permit raises any higher than they jointly agreed to before the Senate did its budget? I heard the rumor, and Speaker Black's refusal to permit a vote on the pro-employee amendment leads me to believe it was accurate.
Did you know that the last two times the state had to have a continuing resolution to continue government funding while the budget issue is unresolved, House Republicans tried to let the raises which had already been agreed on by the House and Senate go into effect? On both occasions, John Blust offered an amendment to the resolution to put the raises into effect. Speaker Black said Blust would have to win a vote to suspend the rules in order to put the raises into effect, and on both occasions the motion failed on pretty much a party line vote (Republicans for the employees getting the raise now and Democrats for stalling to keep the employees on the hook so they can use them to push for higher taxes.)
You would think that after over a hundred years of Democrat control of the NC Senate, with Democrats controlling the NC House all but four (4) of those years, state employees might figure out who is responsible for the fact they're treated very poorly. Unfortunately, until recently, the truth about the mistreatment seldom escaped from Raleigh. This year, thanks to the internet, employees can check things out for themselves. Go to www.ncleg.net. See who voted Aye (for the employees) on August 28 on the motion to suspend the rules.