You Can Take It to the Bank
Woe to the taxpayer who is shouldering the burden of “wealthy” public pensioners and other costs associated with collective bargaining and those dastardly unions.
That’s the message coming from the national media, and now the Burlington Free Press is jumping on the public-employee-bashing bandwagon.
To its credit, a Freeps report published last Sunday acknowledged that 98 percent of retired public employees in Vermont are receiving less than $25,000 a year. Far more sensational was the list of top 100 public pensioners. In the No.1 spot is former judge Dean Pineles, with an annual pension of nearly $98,000.
The Freeps report, which was fairly comprehensive, raised some good questions about whether employees should be allowed to pad their pay with overtime in the years prior to retirement as a way to inflate their pensions.
Buried in the story, however, was something “Fair Game” had reported previously: State employees and teachers have been making concessions to cover shortfalls in the pension system. In a vote earlier this year, state employees agreed to kick in an additional 1.3 percent toward their retirement during the next five years. A bill slated for passage this session would codify that into law.
Many state employees have also taken pay cuts ranging from 3 to 5 percent, effectively lowering the payout amount if they were to retire now.
Gannett workers should be able to empathize. Gannett, which owns the Freeps, regularly furloughs employees and directs them to collect state unemployment funds during their time off. The same public source provides severance for laid-off workers. Ah, yes, privatize gains and socialize losses — that’s the American Way.
While collective bargaining and public-employee salaries are under attack throughout the country, few people are putting hedge-fund managers, Wall Street financiers or rating agencies on the spot.
Even Gov. Peter Shumlin, who opposes raising taxes on the state’s highest earners, has repeatedly said it’s not “hardworking Vermonters” who are to blame for the economic collapse. At a recent press conference, the gov noted, “It’s the greed on Wall Street that left the bill on Main Street that got us into this mess.”
Ironically, Shumlin delivered that assessment just 24 hours before he was scheduled to meet with folks on Wall Street. The purpose? To talk up the state’s finances in hopes of securing a solid bond rating.
Would the gov find the right moment to tell Moody’s it was to blame for the mess? “Fair Game” inquired. He said he would.
“If you want me to, I’m happy to tell them they are part of the problem. Don’t quote me on this, there’s no press around,” Shumlin jokingly told a roomful of reporters, lobbyists and staffers. “But the ratings agencies helped us to get into the mess.”
Not surprisingly, Shumlin didn’t bring up the role of the ratings agencies in the financial collapse during informal talks with execs, according to his top staffers. Instead, they talked about … the sandwiches being served for lunch, not how much Wall Street gobbled up in Vermont’s pensions.
Vermont’s pension funds lost about $1.5 billion during the economic collapse — or roughly one-third of their value, according to the state treasurer’s office. The funds’ value peaked at $3.6 billion in October 2007 and bottomed out at $2.1 billion in February 2009. As of late February, the funds had almost fully rebounded. Only about 1.1 percent, or $36 million, of the state’s pension system was tied up in “toxic assets” — subprime mortgages and credit-default swaps — before the market crash.
Good news, right? Not quite.
“The bad news is that if the systems had simply earned their actuarially assumed rates of return of 8.25 percent for the teachers and state employees systems, and 8 percent for the municipal employees system, since October 2007, the pensions’ combined balances would be well in excess of $4 billion by now,” Deputy State Treasurer Stephen Wisloski told “Fair Game.”
Um, $400 million was “lost” to Wall Street shenanigans, and we’re ogling the annual income of the top 100 pensioners? Really?
Getting that $400 million back won’t be easy.
Lawsuits against ratings agencies by other states haven’t been successful, notes Wisloski. The agencies have used the First Amendment as a defense — claiming bond ratings are “opinions” and therefore protected speech.
Hey, Wall Street, here are two other words protected by the First Amendment: Fuck you.
Mayor Bob Kiss delivered his fifth State of the City address Monday night. Will it be his last?
Kiss is up for reelection next March. Whether he’ll run for a third three-year term or return to private life remains to be seen.
As he plodded through his 16-page speech, a potential strategy revealed itself: Maybe Kiss is just going to keep talking until next March?
The mayor didn’t mention career plans in his speech, but he did bring up two topics that are sure to rile his opponents: Burlington Telecom and support for tax increases.
Kiss said he might ask the city council to let voters decide, again, whether to raise taxes to cover a budget shortfall. Such a vote could happen in May or June. Voters rejected a 4? tax increase in March.
Kiss is expected to suggest a 2? tax increase targeted to cover police and fire expenses. Other city-budget expenses would be cut.
Kiss also told the city-hall-auditorium crowd of about 100 people: “I will continue to fight to preserve Burlington Telecom. I’ve been criticized in some quarters for being too optimistic about BT. I embrace this criticism,” Kiss said. You’ve got to admire his stick-to-it-iveness.
No doubt the mayor’s heart leapt when he saw my April Fool’s Day blog post on Blurt alleging Lockheed Martin was buying BT for $65 million. That was a joke, but what’s coming next for BT and city officials may not be.
Chittenden County State’s Attorney T.J. Donovan, whose office is conducting a criminal investigation, has wrapped up its interviews of city and BT officials. “I can’t give a firm time frame when we’ll decide whether to bring charges,” said Donovan. Because his office is solely looking at state law, Donovan’s decision isn’t affected by a coinciding federal investigation into BT.
He will make his decision public, however, no matter which direction he decides to take the case.
“The public,” Donovan said, “deserves transparency and a resolution.”
Peter and the Paupers
Who would you guess is the multimillionaire in Vermont’s three-member D.C. delegation? The guy who’s been there since 1974 and brings home millions of dollars’ worth of pork projects every year?
Guess again: U.S. Rep. Peter Welch, the newest member of the trio, gets the gold star. He is said to be worth between $3 and $10 million, which makes him the 45th wealthiest member of the House, according to the Center for Responsive Politics.
The most recent report is based on 2009 disclosure data.
Members of Congress measure the value of their stock holdings as a range, which means their wealth is reported the same way — depending on how their stocks, bonds and other assets are worth at a particular point in time.
With that in mind, Sen. Patrick Leahy is worth between $49,007 and $210,000, making him the 89th wealthiest member of the U.S. Senate. U.S. Sen. Bernie Sanders is worth anywhere between negative $234,989 and $444,996. That makes him 91st.
Before you start sending donations, remember, all three earn $174,000 annually.
Speaking of wealthy folks: Which 50 Vermonters signed the letter to Gov. Peter Shumlin suggesting they could afford to pay more taxes? You’ll find the letter, and the signatories, on our staff blog, Blurt.
These folks proposed raising their taxes by $17 million to help close the $176 million budget gap. Both the gov and legislative leaders rejected the idea.
At a recent legislative breakfast in Middlebury, several attendees pressed Shumlin to alter his stance, quoting “Fair Game” in the process. Cool.
According to reports, Shumlin stood his ground, voicing concern that raising taxes would force the golden geese to flee.
Meanwhile, state employees and vulnerable Vermonters can’t afford to move, which makes them … sitting ducks.
Cash & Carry
The Vermont media gave Gov. Peter Shumlin loads of positive attention for his visit to Rhode Island last week. He went down to talk up same-sex marriage.
Oddly, none of the stories made mention of the gubernatorial fundraiser that Marriage Equality Rhode Island held in Shumlin’s honor. I guess any mention of Shumlin’s reelection campaign fundraiser would have detracted from the feel-good nature of the trip.
Not all the checks have been tallied, but Paul Tencher, who helped organize the event, anticipates it raked in between $3500 to $5000.
Some of Vermont’s television-news personalities are moving to new signals.
After more than nine years at WCAX-TV, reporter Jack Thurston is headed to New England Cable News (NECN). He’ll replace Anya Huneke, who is headed to Vermont Public Television to produce season four of that station’s “Emerging Science” series.
Because of a content-sharing arrangement between NECN and WPTZ NewsChannel 5, some of Thurston’s reporting will appear on WCAX-TV’s chief competitor, WPTZ.
At NECN, Thurston will be reunited with a former WCAX colleague, photographer Kika Bronger. The pair worked together when Thurston first arrived at WCAX back in 2001.
In an email to WCAX staff, Thurston said he vows to not view his former colleagues as competitors.
“Instead of saying goodbye, I get to say, ‘See you soon!’ And I’m so glad to be able to,” Thurston told his Channel 3 coworkers.