Salary Compression at FWCS?
I loved this quote from Fort Wayne Community Schools’ Superintendent Wendy Robinson:
Robinson said it’s possible the community didn’t understand the idea of salary compression, a concept she believed was laid out clearly when the board discussed her contract but something that didn’t translate to the other administrators.
District officials have said they’ve been seeing some salary compression between the high school principals and the top administrators, who have more responsibilities, and to keep the higher positions competitive and alluring, it’s necessary to have them pay more.
The top administrators of this district have been failures by any reasonable measure. Yet because a couple of principals are overpaid we have to pay these failures even more? And if we don’t then we’re to believe that these top administrative positions wouldn’t be competitive and alluring? I can’t believe they have the gall to even suggest this when faced with a $15 million budget cut.
Just like looting bankers on Wall Street, the FWCS administration runs the district into the ground all the while demanding more and more of the taxpayers’ money. Here’s a challenge for the board to determine whether or not we need to raise wages to keep the positions “competitive and alluring”:
Go ahead and cut the salaries by 20% and post them as open positions. If 10 or more qualified people apply for any given job then fire the current administrator and hire a new applicant at the reduced rate. If less than 10 qualified applicants apply then go ahead and give them their raise.
Is there ANY doubt what would happen if they did this?
Revisionist History Regarding the City’s “Fiscal Responsibility”
I’ve been looking at public pension obligations lately (another post on this coming soon) and it has reminded me how lucky the city was to have the state assume it’s pre-1977 pension obligations. These pensions were massively underfunded with the total liabilities over $90 Million. The city had saved up $20+ million in its general fund to pay down these debts but clearly they were in a precarious situation moving forward.
The state assumed these obligations as part of the property tax reform legislation that city officials continually bitch and moan about. Yes the state reduced the city’s levy by the same amount, BUT the city got to keep it’s $20 million! So that is where the highly touted “fiscally responsible” city got its bankroll from.
It wasn’t because they were particularly wise - quite the opposite. It’s because they were so far in the red regarding their unfunded pension obligations that they had to start saving cash. And then they got a lucky break because the state was stupid enough to come along and assume those obligations without taking any of the banked cash with them. Also, keep in mind that the actuarial assumption for rate of return on these pensions was 6% - think they’ve seen that over the last 3 years? Fat chance. The city would likely be dead broke right now had the state not foolishly saved their bacon…
The US Senate is full of hypocrites
I am sick and tired of hearing about reconciliation and the “nuclear option.”
Both Democrats and Republicans use the reconciliation process in the US Senate when they are in the majority. Both Democrats and Republicans whine and cry when they are in the minority and the other major political party uses reconciliation. It is pathetic and I am sick of it.
The US Senate is dysfunctional.
Listening to conservative talk radio today was educational; at least as far as illustrating how the Democrats in the Senate are hypocrites. Today I heard soundbites from 2005 including the current President of the US, the current Vice President of the US, and the Democrat in charge of the US Senate rail against using reconciliation. Now that those same people are in the majority party they have “changed their minds.”
Don’t think the Republicans are any better on this issue. They do the exact same thing when “the shoe is on the other foot.”
There are so many hypocrites in the US Senate that we realistically need to throw almost all of them out and start over.
Mike Sylvester
Illinois is completely screwed
There has been a great deal of media attention concerning the fiscal crisis in many states including California, New York, New Jersey, etc. That being said Illinois is also in serious trouble.
Illinois has an annual budget of around 53 billion dollars. They are looking at an annual deficit of about 12.8 billion dollars. They are borrowing one dollar for every three dollars they spend. This is completely insane and obviously unsustainable.
Worse yet the state of Illinois has seriously underfunded their public pension plans. Per a recent report the State of Illinois public pension funds are only 54% funded.
Worse yet the City of Chicago, the public transit system in Chicago, and many other large organizations in the state of Illinois are completely broke.
Unless Illinois enters an economic period with massive growth there is no way that the State can stay solvent without both large tax increases and large spending cuts.
This situation is going to be interesting to watch and it is going to be extremely ugly. I am glad I do not live in Illinois.
Mike Sylvester
The next few years
The last few years have been grim. Wages in the US have stagnated, the stock market has dropped, unemployment has increased (likely permanently in my opinion), and the amount of debt accumulated by our Government has skyrocketed.
I also think the next few years will be grim. I have to admit that the more I have studied the current economic conditions the more grim my outlook for the future has become.
I think that the following is likely to happen over the next few years:
1. The United States Government will continue to accumulate a staggering amount of debt. This debt will eventually cause the dollar to drop to levels not seen in many decades.
2. Many states and local Government entities (likely most) will continue to accumulate staggering amounts of debt. This will cause these Government entities to have to raise taxes and/or drastically cut spending.
3. The residential real estate market has been pummelled. I hope that the worst is over; however, there are millions of homes that will go into foreclosure in the next couple of years and this will ensure that the real estate market cannot recover for years.
4. The Commercial real estate market has also been pummelled. Unlike residential loans Commercial loans come up for renewal every five years. Every five years the banks re-evaluate the loans and can either call the loans or continue them. The interest rates on these loans generally “float” every five years. Quite a few of these loans are going to be called and this is going to ensure that the commercial real estate market cannot recover in the next few years. The vacancy rates and rents from commercial properties has plummeted and this will cause many commercial property owners to default on their loans.
5. I believe that the unemployment rate will be between 8% and 12% over the next couple of years. I think it is likely to hover between 9% and 11%. Many of the lost jobs are in the banking, real estate, and construction fields. I do not beleive these fields will return to pre recession employment levels.
6. Public sector pension funds are woefully underfunded. Public sector pension funds are likely underfunded by well over two trillion dollars. This is going to cause a lot of painful decisions to be made in the next few years.
I believe that there are several things that prudent citizens can do to “weather the storm:”
- Create a family budget. Ensure the the budget is written and that you accurately track your expenses and income.
- Build up a cash reserve that is 3-6 months worth of family expenses.
- Pay off your debt aggressively and do not incur additional debt. I truly feel that interest rates must rise and that wise consumers will pay off their debt.
- Maintain and if possible increase your job skills and your marketability. This is critical and most Americans completely ignore this.
- Start saving for retirement. Make this part of your budget.
- Work as much as you can and make as much money as you can. People often focus entirely on what expenses they can cut; however, the income side of the equation is equally important.
- Cut expenses. There are few Americans who cannot cut expenses. It is incredible how many Americans think that multiple cell phones, big screen TV’s, cable TV subscriptions, and eating out are “necessities.” It is amazing and pathetic.
Believe me I hope that I am wrong and the we enter a long period of stable economic growth; however, I truly do not think that this will happen.
Mike
Be Careful About Reading Too Much Into the State of the City Address
Yea, yea, I’m late to the party with this - what can I say? I’ve been busy.
I thought this was an excellent piece of speech writing. The delivery was off, but let’s face it, the mayor isn’t the best public speaker (he’s getting better). I thought last year’s speech was well written as well, but this year’s was by far the best of the three. Although to be fair, there was a little bit more to talk about this year than last which always makes the writer’s job easier.
In general, the speech did a great job touting his accomplishments but I think there’s one particular point that hasn’t been appropriately dealt with anywhere else in the media. There had been some talk about forcing non-profits to pay fees/taxes for their services as way to increase revenue for cities and towns. Henry backed off that position during his speech with this statement:
That does not mean I am not concerned about property tax caps and how they will affect our future budgets, but Fort Wayne is well positioned financially. Other Indiana cities are discussing new revenue streams, but this is not needed in Fort Wayne. Let me reassure you, I will not put any additional burdens on our nonprofit organizations, who are creating jobs and delivering important services.
I would be very cautious about reading too much into this statement. It seems to me that it was crafted explicitly to make it sound like he’s against tax increases without actually saying that. What Mayor Henry says is that new revenue streams are not needed but he didn’t quite go as far as saying that additional revenue won’t be needed. Until he says otherwise there is no reason to believe the mayor isn’t fully committed to raising the income tax if that’s what he has to do to balance the budget…
A Quick Thought on Evan Bayh
I’ve been anti-Bayh for a long, long time now for a variety of reasons. Some of the biggest reasons were his vote for the Iraq war (he was also a major champion drumming up support wherever he went), his support of the flag-burning amendment and his vote for the industry-written bankruptcy bill.
Having said that, it’s kind of refreshing to see somebody retire who isn’t drawing Social Security or under federal indictment…
Joe Stack and the Rise of American Terrorism
For those that don’t know, Joe Stack was the man who flew his plane into an IRS building in Austin, Texas yesterday killing two people. Stack ran an IT company and posted a manifesto/suicide note on his website that you can read here.
I don’t link to this because I condone the behavior or think Stack’s version of justice is appropriate in any way. However, I do think it gives some insight into the nature of terrorism and why we should expect more violence here in the United States.
I think many people believe that the terrorists of the Middle East are radicals instigated by some dangerous religious indoctrination, but I think that’s a distortion of cause and effect. Economics and the unfairness of what ever system they perceive is controlling their economic plight is the real driver of their radicalism. The religious organizations simply take advantage of these feelings of rage and fuel them to the next level.
I believe as more and more people begin to suffer economically here they will begin to cast a critical eye on our government and other economic powers. When this happens there will always be a minority of people who resort to violence in order to “send a message” to spur further acts of violence.
Again, I don’t believe acts of violence like Stack’s will solve the problem but I couldn’t tell him what would. Where would you tell him to turn to - the American Justice System? Does anybody even believe in that shit anymore? We take it a priori that we’re all more civilized than those crazy middle-easterners and perhaps we are, but it’s a slippery slope into the abyss and the perception of economic injustice can and will breed terrorism here just as it has around the world…
Senator Bayh
Senator Evan Bayh, in a news conference just before the filing deadline to run in the primary, announced his retirment from the US Senate.
Reaction from Indiana Democrats has been interesting to say the least. Senator Bayh’s announcement appears to be a shock to the entire Democratic establishment. Senator Bayh kept his retirement secret and shocked even his own campaign manager.
Nadia Bashir called me today and I did a short interview with her in my office; part of which will be aired on WFFT-TV tonight on their 10 PM news on channel 55.
I have several observations about this retirement:
1. His last minute retirement is a slap in the face to The Indiana Democratic Party and to Indiana voters. Now the Democrats will have to appoint a candidate and there will not be a Demcoratic primary. That is shameful.
2. I think it is very likely that Evan Bayh would have won re-election. I personally think the only Indiana Republican that could have beat Senator Bayh was Mike Pence. Unfortunately Mike Pence decided not to challenge Bayh.
3. I now think the Republicans will win a second Indiana Senate seat in November 2010.
4. I think Bayh’s “retirement” will serve to energize the Indiana Republican Party and will tend to hurt the morale of the Indiana Democratic Party. I think whoever wins the Republican Primary for US Senate will win in November fairly easily.
Mike Sylvester
Are incumbents watching???
It’s Bye,Bye, Bayh - He has announced that he will not run for another term. So are Coats and Souder watching? They better be!! Coats left the Senate with “term-limit” justification - and we don’t need him to go back on his word - like Souder has been doing! Go Stutzman and Rachel Grubb !!!
