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April 5, 2014

Pension Protection and the Detroit Bankruptcy

Detroit's Chapter 9 proceeding can proceed, despite constitutional concerns about impairing public-employee pensions

Alexander Volokh

In previous posts, I’ve discussed how public employee pensions are protected by the Contract Clause of the federal and state constitutions, and I’ve explained the intricacies of constitutional provisions like that in California. It turns out that constitutional pension protections interact interestingly with bankruptcy law, as we’re finding out in the ongoing Detroit bankruptcy.

Taking Seriously Highway Users� Concerns Over Tolling

Robert Poole

Ramming Interstate tolling down the customers’ throats is not only unlikely to prevail in Congress, it is also foolish. That’s not how any other provider of a new and better product or service approaches potential customers. You need to figure out what need the potential customer has and come up with a value proposition showing that your answer is sufficiently better than the status quo to promote acceptance.

Privatization & Government Reform Newsletter #5

March 2014 edition: Detroit water, value-added tolling, Pontiac's shift to a contract city, e-cigarette taxes, and more

Leonard Gilroy

In this issue:

• MUNICIPAL BANKRUPTCY: Detroit Seeking Private Water/Wastewater Partner
• PUBLIC HEALTH: States Consider Counterproductive E-Cigarette Taxes
• INNOVATORS IN ACTION: Pontiac, Michigan Transforms Into Contract City
• INFRASTRUCTURE: Privatization Developments in Highways, Aviation
• TRANSPORTATION: Value-Added Tolling
• ASSETS: Privatized Parking a Win-Win in Indianapolis
• CONTRACTING: Washington State Legislature Rejects Anti-Privatization Bill
• News & Notes

Surface Transportation News #126

Value-Added Tolling: getting to "yes" on Interstate modernization, How to mislead with transit data, New developments in arterial underpasses

Robert Poole

In this issue:

• Value-Added Tolling: getting to "yes" on Interstate modernization
• How to mislead with transit data
• New developments in arterial underpasses
• Fifth Amendment deals setback to rails-to-trails
• Continuing debates over mileage-based user fees
• First truck toll lanes open in Tampa
• Upcoming Conferences
• News Notes
• Quotable Quotes

Washington State Legislature Rejects Anti-Privatization Bill

Legislation would have created barriers to competitive contracting

Leonard Gilroy

Washington taxpayers may have just dodged a bullet in the legislature on state government contracting issues, though policymakers should be wary in case the issue resurfaces again in future legislative sessions.

Privatized Parking a Win-Win in Indianapolis

Efficiency, operational improvements enhancing revenue to the city

Leonard Gilroy

Critics of the privatization of municipal parking assets often point to Chicago’s pioneering—albeit unpopular—implementation of it’s 75-year, $1.1 billion parking meter system lease as a warning that such deals will result in cities giving up parking-related revenues over the duration of the deal, effectively trading a long-term revenue stream for upfront cash. However, Indianapolis’s experience with parking privatization tells a far different story, one that illustrates that these are not cookie-cutter transactions, but rather customizable contracts that can—and should—be tailored to each community’s context and policy goals.

Landowners Are the Key to Prairie Chicken Conservation

The successful approach is incentives-based, not top-down

Brian Seasholes

On March 27, the long-held fears of the oil and gas industry, various state governments, and thousands of landowners were confirmed when the lesser prairie chicken was listed under the Endangered Species Act.  The lesser prairie chicken, a member of the grouse family, has much of its habitat in the Permian Basin of West Texas and Eastern New Mexico, a region that just happens to produce 15 percent of all U.S. oil and five percent of U.S. natural gas.

In order to conserve the prairie chicken, U.S. Fish and Wildlife needs a plan.

Ventura County Pension Reform Would Save $460 Million, Reduce Debt $1.8 Billion

Pension Reform Actuarial Analysis

Anthony Randazzo

The Ventura County Employees’ Retirement Association (VCERA) is poorly positioned to stay properly funded in the coming years, and local taxpayers may be forced to pick up a hefty tab of unfunded liabilities if substantive changes are not made in the near future. An initiative by county residents would address the risk of long-term liabilities by putting new hires into a 401(k)-style defined-contribution system and phasing out the defined-benefit system over time.

A Reason Foundation analysis of the proposed reform finds that, if adopted, the initiative would save Ventura County $5.4 million in cash flow over the first two years, $51.6 million in cumulative savings over five years of reform, and $460 million in total savings over 15 years—all while separately eliminating $1.8 billion in pension debt. In the long run, moving to a new defined-contribution system would protect taxpayers from unfunded liabilities and investment return risks in public retirement systems.