In a shocking display of arrogant hubris, Riverside's Andy Duus and his wife Nancy Cooper have analyzed Connecticut's pension mess, seen the looming disaster, and prescribed a solution.
Both boast long resumes in finance: Duus was a Wall Street investment banker for 17 years with Goldman Sachs and Bear Stearns. Cooper worked as a chief financial officer for IBM, Pitney Bowes and CA Technologies since 1977.
... In 2014, the pair embarked on an investigation of “the state of the state” — researching the budget became their new pet project.
Cooper spent three months pouring over reports from the state Office of Fiscal Analysis, Moody’s, the Pew Research Center and George Mason University.
After endless analysis, Cooper took her findings public. She gave a presentation at Town Hall in 2014, sponsored by the League of Women Voters.
“A lot of people came up to me and told me that I had my facts wrong,” she said. “But I was very confident that my facts were right.”
In March 2016, Duus gave another public presentation on the state budget — a detailed Powerpoint — this one offering solutions to the fiscal woes.
Revenue is not Connecticut’s problem, they said. Connecticut taxpayers bear one of the highest state and local tax burdens per capita in the nation, according to a leading independent tax policy nonprofit.
Instead, Duus and Cooper point to underfunded and snowballing pensions for state employees and teachers as the biggest source of the problem.
Connecticut owed more than $1.5 billion in pension payments in 2016, according to State Comptroller Kevin Lembo. That annual payment could grow from $1.5 billion to nearly $6 billion by 2032.
“It’s death by a thousand cuts,” said Duus. “We never solve the problem, we’re just delaying it. It’s just kicking the can down the road.”
Duus ... proposed a “buy out” of state employee and teachers’ pensions, something uncommon in the public sector, but very common among corporations.
Essentially, employees would trade in their defined benefit pension plans for defined contribution plans, a matching plan that specifies how much an employer must contribute to an employee’s retirement account, typically a 401(k). If they were to switch, employees would get a lump sum from the state equal to the amount of pension money they had earned so far, which they could place into their new 401(k)s.
The state would still have to borrow billions to give out the retirement money, but the buy-out would stop the pension deficit from growing even bigger, Cooper and Duus said.
Duus met with Malloy advisor Ben Barnes, secretary of the state Office of Policy and Management, in April 2016 to pitch the pension buy-out to him.
Barnes listened to Duus’s proposal but didn’t bite.
“Moving the state to 401k-style plans that are primarily driven by ideology and the financial services industry” would “provide no appreciable savings to the state, zero resolution to the unfunded liability, and create a closed pension system that would expose the state to fund the entirety of market shocks,” said Chris McClure, a spokesman for Barnes. “They should not expect that type of pension reform from this governor.”
Duus left the meeting with Barnes feeling disappointed.
A proposal that doesn't include punishing the rich and rewarding Democrats? For two such obviously intelligent people, I'm astonished they were "disappointed" by Malloy's rejection.
I don't know what the answer is here - Duus and Cooper are doing the hard work, but it seems no more effective than the sideline kvetching of lazy folks like myself. Now that's discouraging.
But I suspect one of my conservative heros, Bill Whittle, would cheer this Riverside couple on, and applaud their efforts. Here's what he had to say on the general topic recently:
Whittle offers sobering, but realistic, encouragement to conservatives sensing they can’t take a break from fighting for liberty. He says of the left, “they can win; we can lose. Entropy is on their side. It’s easier to take money, than make money. It’s easier to tax a business, than run a business. Democrats are giving away free candy, and Republicans are selling vegetables. Every single day we have to roll the boulder up the hill and our reward for this is we have another day where we have to do it again. If you can be ok with that, you can say, ‘not today, they didn’t knock our freedoms away today.’ And we’ve been doing that for 250 years.”