Archive for May, 2015

Lacrosse Title Follows Me to Colorado

The University of Denver won its first NCAA Division I lacrosse title over the weekend, bringing the title west of the Mississippi for the first time since the tournament started in 1971.  I suspect coach Bill Tierney had more to do with the team’s success than I did.  Tierney earned my enmity and respect as coach of Princeton, where he turned that program into a national powerhouse in the 90s, winning 5 titles, a couple of them over Virginia in overtime.  Some are arguing that this win makes Tierney the greatest coach of all time, and certainly there’s a strong case to be made.

In some sense, Colorado was just waiting for a Bill Tierney to come out here and do this. The state is one of the few west of the Mississippi where lacrosse is popular, and both CU and CSU have done well in the club championships in past years.  CSU has won the club title 6 times, twice over Colorado, who also won in 2014 before losing in this year’s finals, so there’s a talent base out here.  Still, only seven of the team’s 45 players are from Colorado; Tierney’s also been able to recruit from all over the country.

This year, Tierney beat both Big 10 and ACC schools – Notre Dame and Maryland – on Championship Weekend.  Those of us over a certain age can’t quite get used to the fact that Maryland was the Big 10 school, and Notre Dame from the ACC.

In some sense, this could only have happened in a time of an expanded tournament.  Gone are the days when an 8-team tournament was dominated by Virginia, Maryland, Cornell, Carolina, Hopkins, and Syracuse (and later Princeton).  The sport has a much broader base, with Duke, Notre Dame, and Loyola having made appearances or won titles in recent years.  In some sense, that’s Tierney’s doing, too, since he broke Princeton into the top tier at a time when the ACC habitually held down three of eight tournament slots, and winning the Ivy League was his only realistic route to the Championship.

Tierney has built a serious program out here, and is likely to win more titles before he’s done.

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PERA’s Pension Obligation Bonds Are a Bad Idea

This is an extended version of the OpEd that appeared in the Greeley Tribune.

Last week, Colorado legislators considered – and rejected – a plan of dubious legality to shore up the state’s public pensions.

The result of a difficult three-way negotiation among Governor Hickenlooper, Treasurer Stapleton, and PERA, the plan would have circumvented the state Constitution’s limits against issuing general obligation debt without a vote of the people, for gains that would have been largely illusory.

Worse, the changes could have encouraged future legislatures to repeat mistakes that put teachers’ and state employees’ retirements at risk in the first place, while making real reforms more difficult.

HB15-1388 would have authorized the State Treasurer to direct the Colorado Housing and Finance Authority (CHFA) to issue up to $10 billion in bonds on the state’s credit. The proceeds would have been deposited into PERA’s State and School funds, and invested with the rest of PERA’s assets. The investment returns theoretically would shorten PERA’s time to full funding.

The bonds’ interest was to be funded by the supplemental payments that the state and school districts pay into PERA (the AED and SAED), with PERA paying back the principal when the bonds matured.  The AED and SAED payments are taxpayer contributions established in 2004 and 2006 to stabilize PERA’s finances.  They are escalating percentages of employee salaries.

The complex web of relationships was needed to avoid state constitutional limits on issuing debt. The bill’s language laid out the legal arguments for why the restrictions didn’t apply. Supporters claimed they were revenue bonds that would not obligate general tax dollars, and purported that CHFA is not a state agency.

Passing the buck to the courts, HB 1388 would have required a binding judicial ruling certifying the scheme’s legality before the bonds could have been issued.

Make no mistake: The debt would have been on the state’s credit, and shown up on the state’s balance sheet. These are not revenue bonds; they would have been funded only by general tax revenue.

Whether or not the game of hide-the-pea satisfied the courts, it violated the spirit and purpose of constitutional provisions designed to prevent the legislature from indebting citizens into a long-term fiscal bind. The many state bankruptcies of the 1840s were still fresh in the people’s minds in 1876, when the Constitution was drafted. Those concerns are no less valid now.

The bonds wouldn’t have shown up in PERA’s financial report, except in the footnotes. With no single, authoritative document laying out the full financial picture associated with funding the state’s public pensions, PERA would look better-funded than it was.

Risk-averse legislators could have justified avoiding the difficult decisions needed to provide real retirement security for Colorado’s teachers and state employees. Future legislatures might have been tempted to repeat the mistakes that put that security at risk in the first place. While a full legal analysis awaits, tying the AED and the SAED explicitly to a bonded debt might have complicated any attempts at more sustainable reform.

A comprehensive study by the Center for Retirement Research found that the misuse and mistiming of pension obligation bonds have punished numerous states and municipalities over the last 20 years. The Government Finance Officers Association recommends against their use.

To their credit, the bill’s architects studied past failures and tried to mitigate the risks to Colorado and its schools. The annual interest on the bonds could have been no larger than two-thirds of each year’s anticipated AED and SAED, with a minimum 2 percent spread between the bond interest rate and PERA’s anticipated rate of return. Statutory contributions to PERA – inadequate though they are – would have remained intact, and bond proceeds would have been unavailable for diversion to other spending.

Still, the deal entailed significant risk. Proponents misleadingly argued that it refinanced 7.5 percent debt at 4.5 percent. In an actual refinance, the original obligation is paid off. Here, the pension obligation would have remained, with Colorado taking on additional debt.

Even PERA’s claim that its current debt should be discounted at 7.5 percent is based on an accounting gimmick only available to US public pensions – and no other pensions in the world.  (Not coincidentally, without the discipline of correct accounting, US public pensions are also the worst-funded public pensions in the world.)

As contractual promises, they should be discounted at the same interest rate as the bonds.  PERA would just be adding 4.5 percent debt to the true 4.5 percent debt of its current contractual obligations, improving its situation only marginally.

The proposal’s safeguards would not have changed the fact that proponents were seeking to close the funding gap by taking on additional debt and risk.

While the governor and the treasurer are to be credited for taking PERA’s underfunding seriously, HB 1388 was the wrong answer to the problem.

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Yeah, But Does Free Speech Have To Be So Speechy?

Seen on a friend’s Facebook page: “Pam Geller makes is awfully hard to defend the First Amendment.”

Let’s stipulate for purposes of this post that gratuitous sexual innuendo – or outright graphic depiction – aren’t really my style, and I don’t think they do much to advance the discussion about what to do about Islamism.  I don’t think that’s what Pam Geller is about, but if it lets you keep reading, we’ll stipulate that.

Let’s also stipulate the Pam Geller is a rhetorical bomb-thrower, who tells Islamists to suck it up, cupcake, and non-Islamist Muslims to examine what they’re doing (or need to do) to get their religion’s crazies back under control.  The purpose of the “What’s your jihad?” campaign isn’t to accuse Muslims of sharing Hamas’s co-joining of politics, hatred, and religion.  It’s to challenge normal, everyday Muslims to re-examine their religion’s relationship to politics.  These are unpleasant subjects, and unpopular themes.

Even with that, my friend’s commenter has it exactly backwards.

It’s not Pam Geller who makes it hard to defend the First Amendment.

It’s newspapers like the New York Times, and publishing houses like Yale University Press, who refused to publish the Danish Mohammed Cartoons – even in articles and books discussing them – out of fear.  Even Reza Aslan, in the Times article, argues for including the cartoons not because it’s correct, but because it’s now safe.

By failing to stand up to the Islamist bullies at the time, they effectively conceded that self-censorship for self-preservation made sense.  Had they done so, Geller’s event might not have even been necessary.  Indeed, had they done so, Geller herself might be either less relevant (if as inflammatory) or less inflammatory (in order to stay relevant).

Nobody decent defends the attacks by the two ISIS fanboys from Phoenix, nobody who makes excuses for them is decent.  So a denunciation of them as a prelude to, “But…” doesn’t buy the author or speaker any credibility.  The mere act of denouncing them implies there might be some decent audience who thinks they might be acceptable.

Also troublesome is the comparison of Geller to an arsonist, either by her defenders or her detractors.  The Islamists are not a force of nature, devoid of moral agency; they are people, responsible for their actions, and for the despotic creed they promulgate.

In the end, the winning cartoon wasn’t even about Muhammad per se, it was a meta-cartoon about its own right to exist:

That the two schlubs from Phoenix couldn’t tell the difference between “Draw Muhammad” and “Draw, Muhammad” tells you all you need to know about what we’re up against.


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