Originally published in the Deseret News, Dec 14, 2012
Last week I had the opportunity to be in the same room with a dozen of the finest leaders, educators, advocates and volunteers Utah has to offer. We convened, at the invitation of the Deseret News, to discuss the state’s pathway forward through these uncertain times. The conversation naturally settled on the need for improvements in public education and the multitude of reforms that could make material, positive impacts on educational success. I was delighted with the conversation, and I mentally rebuilt the dream public education system — a system not subject to scarce taxpayer resources (think “visions of sugar plums” but through an amateur economists’ eyes).
That brief intellectual oasis faded almost immediately for me when I opened my eyes once again to the financial situation we face as a state. While we are committing more resources than ever before toward public education, we are not keeping pace with public education needs. Enrollment is surging — Utah schools expect a 30 percent increase in public education enrollment this decade alone. Recession-related costs are exploding — legacy Medicaid and pension costs, in particular, have sucked up nearly every available budget dollar over the last four years. The labor market is still weak — while Utah’s unemployment rates are lower on a relative basis to other states, job uncertainty and underemployment are the reality for many Utah families.
As if the confluence of these circumstances were not enough, the looming “fiscal cliff” could strip $2 billion out of the Utah economy in 2013, increase taxes for 900,000 Utah families by an average $2,200 and blow a $500 million hole in the state budget. These are uncertain times indeed — especially when it comes to educating our children.
I returned home after the Deseret News panel to the nightly Liljenquist family routine of chores, piano practice and homework. With my wife, Brooke, out of town on an annual retreat with several of her closest girlfriends, it fell to me to “crack the whip” so to speak. I dutifully marched up to each of my school-age children and recited my standard refrain, “Do your homework.”
Satisfied with my intense effort to facilitate learning in our home, I settled down on the couch to tackle the weightier matter of managing my fantasy football team for the week (I’m second place in my division with a respectable 7-6 record).
A few minutes later my wife called to give me detailed homework instructions for each child. She knew exactly what each child needed to work on, all the assignments that were due the next day and, most importantly, where each child needed a little extra attention. In particular, she made me commit to work one-on-one with our kindergartener, Joshua, for at least an hour.
I then spent the evening doing my homework. I worked with my Joshy-boy — reading with him, counting with him, holding him on my lap. He must have said, “I love you daddy” 10 times in our hour together, and I found myself kissing the top of his head just as often. An hour of homework later turned into a wrestling match with all the kids, an impromptu Christmas carol concert and an orderly transition to bedtime. I am still smiling about that evening.
Professor Robert George of Princeton once said: “The family is the original and best department of health, education and welfare.” That message has hit home with me. In a tumultuous, uncertain world, with unprecedented pressures on our public and personal budgets, with unimaginable burdens placed on our teachers, we as parents can make up for much of the investment gaps in education by investing our time. We, as parents, need to do our homework.
From the article: “On close examination, the city’s decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case is straightforward — and alarmingly similar to the path traveled by many municipalities around America’s largest state. San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers….
Unions poured money into city council elections, and the city council poured money into union pay and pensions. The California Public Employees’ Retirement System (Calpers), which manages pension plans for San Bernardino and many other cities, encouraged ever-sweeter benefits. Investment bankers sold clever bond deals to pay for them. Meanwhile, state law made it impossible to raise local property taxes and difficult to boost any other kind.
No single deal or decision involving benefits and wages over the years killed the city. But cumulatively, they built a pension-fueled financial time-bomb that finally exploded.
In bankrupt San Bernardino, a third of the city’s 210,000 people live below the poverty line, making it the poorest city of its size in California. But a police lieutenant can retire in his 50s and take home $230,000 in one-time payouts on his last day, before settling in with a guaranteed $128,000-a-year pension. Forty-six retired city employees receive over $100,000 a year in pensions.
Almost 75 percent of the city’s general fund is now spent solely on the police and fire departments, according to a Reuters analysis of city bankruptcy documents – most of that on wages and pension costs.”
Read the entire article here
Two weeks ago the California Legislature passed a new law establishing the “California Secure Choice Retirement Savings Program (CSCRSP).” Under the guise of promoting retirement security for Californians, CSCRSP requires employers to collect a 3% wage tax from their employees every pay period. These funds are to be turned over to the State to be “invested” on behalf of its citizens. Unfortunately for California taxpayers, this new law is in effect a massive tax increase that could be used to prop up the California Public Employees’ Retirement System (CalPERS) – which is in dire need of real reform.
In just a few short months, nearly every employer in California will be begin withholding 3% of all employee pay for the CSCRSP. An estimated $6.6 Billion in the first year alone will be “invested” with a professional fund manager selected by a seven-member board chaired by the State Treasurer. The State Treasurer serves as an ex-officio member of CalPERS, and it is widely anticipated that CalPERS will be selected as the professional fund manager for this new program.
Once CalPERS is entrusted with the substantial new revenue streams from the CSCRSP program, it will be allowed by statute to invest those funds “in conjunction with other funds”. The stated investment policy of CSCRSP is to “preserve the safety of principal and provide a stable and low-risk rate of return”. This rate of return will be set by the CSCRSP board, and will likely be very low. The end result of the pooling of investments and low expected returns will allow CalPERS to siphon off excess investment returns from citizens of California to shore up overly generous pensions for public employees. CalPERS is currently facing $135 Billion of unfunded pension liabilities, but is still guaranteeing California public employees investment returns of over 7%. Instead of trimming benefits for current public employees or asking them to pay the full freight of their pensions, the California legislature has turned to the taxpayers once again.
Diverting another $6.6 Billion from the private sector to the public sector of the economy will not solve California’s financial problems. Instead, it will exacerbate them. Conveniently, while the State confiscates 3% of wages for this retirement program, the legislation at the same time absolves the State of California from “any and all liability” for funding retirement benefits for its citizens. Citizens of California should be very, very concerned about the California Secure Choice Retirement Savings Program.
Stockton, California recently filed for bankruptcy because of out-of-control retirement costs. Back in the mid-90’s, in the middle of a stock market boom and on the verge of soaring real estate prices, the city decided that it would give firefighters full healthcare for life rather than pay increases. The next year, other public employees demanded – and received – the same deal.
Standard pension benefits ballooned as well. Police officers could retire at age 50, with generous benefits, while other city employees can retire at age 55 (compared to the majority of private-sector workers who cannot retire until their 60’s or later).
In less than 20 years, the city faced a $417 million liability but even as warning signs started to appear, public employees continued to get additional benefits, while the city spent money
in other areas as well. Wanting to “revitalize” the city’s downtown, a $47 million bond was issued in 2004 to finance an arena – which lost money. The riverfront was financed by $100 million in debt – and is now underwater. A $125 million pension obligation bond sold by Stockton in 2007 resulted in a 23% loss on its invested proceeds. To top it all off, the housing bubble burst and by 2009, a decade’s worth of housing price increases was erased.
So far this year, Stockton has missed $2 million in bond payments. The bankruptcy filing calls for the city to forgo about $10 million in additional debt payments this year alone, cutting employee compensation and getting rid of lifetime health care benefits for retirees. After months of talks with creditors, city manager Bob Deis said they were left with no other option but to file for Chapter 9 protection.
On Tuesday night, the city council of San Bernardino voted to filed for bankruptcyas well. They are facing a $45 million shortfall this year. If they do file, they will be the 3rd California city in recent weeks, joining Stockton and Mammoth Lakes.
Reality is catching up with municipalities and states – addressing these long-term structural deficits can no longer be avoided or ignored.
As we celebrate America’s Independence Day, I am reminded of something Ronald Reagan said several decades ago. “Freedom is never more than one generation away from becoming extinct. Freedom is not passed down from one generation to the next through the blood stream. Freedom must be fought for and defended by each generation, otherwise you will be setting on your front porch in your old age, telling your children and your grand children what it was like to live in America, when men were free.”
When our Founding Fathers pledged their “lives, their fortune and their sacred honor” they meant it. They were willing to give up the illusion of security under the British crown for the messy, demanding and costly process of becoming free. They committed an act of treason, punishable by death, by signing the Declaration of Independence. They spent time away from their homes and their families because of their love of liberty and their whole-hearted commitment to this nation. Benjamin Franklin missed his daughter’s wedding and to his great sorrow, the death and funeral of his wife because of his commitments internationally. Abigail Adams gave birth to a stillborn daughter while her husband was away in Philadelphia. Thomas Jefferson lost a 2 year-old daughter to whooping cough. It took 7 months for word to reach him in France
Seventeen of the 56 signers actually fought in the American Revolution. Five were captured by the British and one of those, Richard Stockton, never recovered from his incarceration. He died in 1781. Thomas McKean of Delaware wrote in a letter that he was “hunted like a fox by the enemy – compelled to remove my family five times in a few months…” Carter Braxton, from Virginia, was a wealthy plantation owner. He loaned 10,000 pounds to support the Revolutionary War that was never repaid and his support of the shipping industry servicing the fledgling nation led to personal debt. He died a poor man at age 61. Lyman Hall saw his Georgia estate burned to the ground. John Hart, a farmer from New Jersey, served in the New Jersey Assembly, including time as its Speaker. His farm, livestock, grist mills and property were destroyed by Hessian mercenaries. His wife, having fallen ill during those difficult times, died on October 8, 1776 with her husband by her side. He then spent the winter hiding in the forest and sleeping in caves. Two years later, he invited General Washington’s army to make camp on his farm. Twelve thousand men camped on his fields during peak growing time. A few months later, John Hart died at age 66. There are numerous other examples, including many men and women whose names never became well-known, but who sacrificed for the cause of freedom.
Today, the battle for freedom looks different than it did in 1776. It is, however, just as important for our children and grandchildren. We cannot afford to sit idly by – the stakes are too high. Thomas Jefferson said: “Eternal vigilance is the price of freedom.” Thank you to all of you who have engaged in this fight. See you on the battlefield!
Writing a letter to the editor is an easy way to show your support for Dan and reach a broad audience. Keep your letter short and focused on one or two issues. Here are the links to submit your letter to the editor for a few of the major newspapers:
Deseret News - http://www.deseretnews.com/
Salt Lake Tribune - http://www.sltrib.com/
Daily Herald - http://www.heraldextra.com/
Herald Journal - http://news.hjnews.com/
Standard Examiner - http://www.standard.net/
(Salt Lake City, UT) – May 30, 2012 – Conservative Republican Dan Liljenquist today reiterated his support for lower taxes, spending cuts, and entitlement reform. This is in stark contrast to his opponent, 36-year incumbent Senator Orrin Hatch, who has repeatedly voted to raise the debt ceiling and thus raised taxes on future generations of Americans.
“We don’t have a revenue problem in this country, we have a spending problem,” Liljenquist said. “Congress needs to cut spending and reform entitlements before it’s too late. That’s what I did in the Utah Legislature and that’s what I’ll do in the U.S. Senate.”
Liljenquist is one of a number of conservative leaders who have signed Grover Norquist’s anti-tax pledge, signing it in 2010 as a Utah State Legislator and again this year as a candidate for U.S. Senate.
“Senator Hatch has voted to raise the debt ceiling 16 times during his career. That’s $7.5 trillion he’s placed on the backs of our children and grandchildren,” said Liljenquist campaign spokeswoman Holly Richardson. “He’s voted to raise his own pay numerous times and was the 3rd highest earmerker in all of Congress, even voting for the infamous ‘Bridge to Nowhere’. His out of control spending is irresponsible and is leading us down the path to bankruptcy.”
“Hatch to this day defends his vote for Medicare Part D, which former comptroller general David Walker called ‘the most fiscally irresponsible piece of legislation since the 1960s’,” added Richardson. “36 years in Washington has changed Orrin Hatch. It’s time for him to come home.”
Conservative Republican Cruz Forces Runoff Despite Being Outspent 5-to-1 by opponent
(Salt Lake City, UT) – May 29, 2012 – Conservative Republican Dan Liljenquist tonight congratulated Ted Cruz for forcing establishment candidate David Dewhurst to a July runoff in the Texas Republican primary.
“Just like in Texas, Utah voters know we need to send fiscal conservatives to Washington to put America’s future back on the right track,” said Dan Liljenquist. “Now is the time for a new generation of leaders to stand up and make the changes necessary to put America back on the right track.”
The forced runoff in Texas is similar to the result of the Utah State Republican Convention held last month, where Conservative Republican Dan Liljenquist forced 6 term incumbent Senator Orrin Hatch into his first primary since 1976.
“Voters are tired of the growing national debt and out of control spending,” said Liljenquist spokeswoman Holly Richardson. “Senator Hatch has voted 16 times to raise the debt ceiling for a total of $7.5 trillion. He’s voted time and again for bloated, unsustainable budgets. Utahns are ready for a Senator who will not just preach fiscal conservatism, but practice it as well.”