Medicaid expansion discussion should be based on reality not promises of "free money" from Washington.

Patrick Parks talks about Medicaid expansion and Obamacare in Kansas
Kansas residents who are already paying more for health insurance will also pay much more to fund an expansion of Medicaid. Patrick Parks, a fiscal policy analyst at the Kansas Policy Institute, talks about research KPI and other organizations have done in...
Fri, 20 Mar 2015 19:05:57 +0000
Kansas' school finance system does little to serve our children. Instead it focuses on institutions. We need a student-focused, transparent formula that requires the efficient use of taxpayer money.

Legislature Considers Changes to School Funding Formula
Dave Trabert, president of Kansas Policy Institute, talks about the state's K-12 school funding formula. The Kansas Legislature is considering block-grant funding schools for the next two years while they take a deliberative look at rewriting the formula....
Thu, 12 Mar 2015 15:10:07 +0000
Kansas schools on track to receive $6 billion this year, setting a new funding record for the 4th consecutive year.
Mon, 09 Mar 2015 16:43:11 +0000
Last Refreshed 3/27/2015 7:01:15 AM
Significant reform needed in KPERS

The newly formed Kansas Public Employees Retirement System Study Commission faces a daunting task. The most recent valuation report reveals unfunded liabilities have increased to $8.3 billion and the funding ratio fell to 62 percent, placing KPERS amongst the country’s most underfunded plans.

Still, the liability is actually much worse than reported, perhaps as high as $15 billion. KPERS assumes an 8 percent annual return on investments and acknowledges that may be optimistic. Financial experts argue government pension plans should estimate liabilities like private sector plans and use a rate that reflects the market risk inherent in those liabilities.

A recent study by finance professors from the University of Chicago and Northwestern University estimates state pension liabilities using real Treasury yields to calculate the funding required to pay off liabilities over 30 years. Their study puts the price of not reforming KPERS at either an 11.7 percent tax increase, an 11.7 percent funding reduction for schools, social services and other government functions or some combination of the two.

Clearly, major reform is needed.

Many options exist to reduce benefits and still provide a more lucrative retirement plan than most taxpayers receive. The current defined benefit plan allows someone with 35 years’ service and final average salary of $50,000 to retire with about the same take-home pay, including Social Security. A defined contribution 401(k) plan should be created for new hires. Benefits for those still working can be modified, the early retirement age can be increased and other oddities can be eliminated, such as “double-dipping,” buying discounted service credits and the special treatment afforded legislators.

Kansas is already suffering economic stagnation and job loss from a growing tax burden. Indeed, Kansas is the only state whose 2011 average annual private sector employment level is lower than 2010. State and local taxes increased at nearly twice the level of inflation over the past 10 years, and that doesn’t include the full impact of the sales tax increase. There simply is no room for another straw on the camel’s back.

Another year like 2008 would create a high probability that underfunded pension plans such as KPERS will eventually default on their obligations.

Political pressure to protect these lucrative, unsustainable benefits will be intense, but the choice is crystal clear — enact major pension reform or pick between double-digit funding cuts or job-killing tax increases.

With all of this in mind, we hope the KPERS Study Commission chooses wisely.

View full article at The Topeka Capital Journal. Click here
View full article at The Hays Daily News. Click here