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Report: Public pensions flagging financially in three Southeastern states | Alabama

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www.thecentersquare.com – By Steve Wilson | The Center Square – 2023-08-02 05:34:00

(The Center Square) — A new report says public pension systems in Alabama, Mississippi and South Carolina are struggling financially and need reforms to avoid taxpayer bailouts or riskier investments.

The Equable Institute, which authored the report, is a bipartisan nonprofit that helps policymakers solve funding challenges with public pensions.

The authors, Executive Director Anthony Randazzo and research Vice President Jonathan Moody, say most state and municipal pension plans are distressed or fragile based on their analysis of their funding ratios, which is defined as the share of future obligations covered by current assets. 

Regionally, South Carolina is in the worst position with a funding ratio of only 58.3%. Its unfunded liabilities would gobble up 9.21% of the Palmetto State’s gross domestic product.

According to the report, officials in the Palmetto State have increased their taxpayer contributions for the South Carolina Retirement System starting in 2018 with a 200-basis point increase from the previous 11.56% rate and 100 basis points after that. 

Mississippi’s funding ratio is at 59.9% and its unfunded liabilities would eat up 14.88% of the state’s GDP.

Alabama’s funding ratio hovers at 61.7% and its unfunded liability represents 8.88% of the state’s GDP.

Most of the Southeastern states have well-funded pension systems, led by Tennessee (97.4% funding ratio), followed by North Carolina (84.1%), Florida (82.2%), Georgia (72.3%) and Louisiana (71.5%).

The authors singled out Mississippi over what they consider to be an excessive predicted rate of return. Mississippi is the only state nationally with a 7.55% investment forecast, but the Public Employee’s Retirement System of Mississippi’s governing board is planning to eventually lower that to 7%.

The study’s authors also say that many pension funds have predicted rates of return for their investment that are too high. According to their data, the average rate of return for pension investments nationally is 6.88%, a figure they say is still too optimistic.

According to their data in 2020, 54 pension funds had a predicted rate of 7.5%, but 65% of those funds have lowered those expectations. 

Pension funds are also investing more in riskier parts of their portfolios, which includes stock markets, real estate and hedge funds due to lower interest rates. According to Equable’s data, this type of investment is the largest in history, both in terms of the dollar figure ($1.63 trillion) and the 34% share of pension investments. 

According to the report, taxpayers (with the employer contribution) are paying a bigger slice, as unfunded liability payments have increased by 64%.

Unfunded liability payments have increased 2,089%, going from less than $5 billion in 2001 to more than $100 billion in 2022.

Demographics are also playing a role in the unraveling of pension funds. In 2001, according to the report, 12.6 million active public sector workers supported 7.6 million retirees and beneficiaries. In 2015, the number of retirees eclipsed the number of active employees, with the latest data showing 14.2 million workers supporting 18.2 million retirees and beneficiaries. 

Nationally, the report says unfunded liabilities slightly decreased from $1.57 trillion to $1.49 trillion, while it predicts the average funding ratio of state and local pension plans will improve from 75.4% to 77.4%.

The report also says these gains aren’t enough to improve the long-term financial outlook of these pension funds, requiring policymakers to increase the amount paid by state and local government employees, the taxpayer contribution or both. 

The five states with the largest unfunded liabilities – Illinois, California, New Jersey, Texas and Pennsylvania – have a shortfall of $787.3 billion. This figure is slightly larger than the rest of the nation’s unfunded pension liabilities combined ($778.6 billion). 

Also, the report says 33.7% of the unfunded liabilities in the five biggest states belongs to Illinois and California. 

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News from the South - Texas News Feed

Texas House committee advances school choice bill, a first in state history | Texas

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www.thecentersquare.com – By Bethany Blankley | The Center Square contributor – (The Center Square – ) 2025-04-03 17:22:00

(The Center Square) – The Texas House Committee on Public Education on Thursday passed a school choice bill for the first time in state history.

The committee, chaired by state Rep. Brad Buckley, R-Killeen, passed SB 2, filed by state Sen. Brandon Creighton, R-Conroe, which passed the Texas Senate and was sent to the House for consideration. The legislation would create an Education Savings Account program to provide taxpayer-funded subsidies for primarily low-income families of roughly $10,000 per student.

Both the Texas Senate and House proposed budgets allocating $1 billion for the program to support roughly 100,000 students, prioritizing low-income and special needs students, The Center Square reported. The savings accounts can be used by parents to send their children to the school of their choice, including private schools.

The committee advanced the bill by a vote of 9-6. It also passed HB 2, a school funding bill filed by Buckley by a vote of 13-2. Buckley filed an education package, including HB 2, HB 3, the House version of SB 2, and HB 4, implementing public school assessment and accountability processes, The Center Square reported

The package was filed after House Speaker Dustin Burrows, R-Lubbock, identified expanding public-school funding and creating the state’s first ESA program as legislative priorities. Public education and creating Texas’ first ESA were also identified as emergency legislative items by Gov. Greg Abbot. Lt. Gov. Dan Patrick listed school choice as a legislative priority in the Texas Senate, which has passed school choice bills for several years that went nowhere in the Texas House.

Abbott praised the committee vote, saying, “Texas is within reach of the largest school choice program launch in the nation.” Abbott has led the charge to pass the bill after previous efforts failed in the House, including successfully campaigning last year to replace House Republicans who opposed the measure. Abbott’s efforts paid off. Many new House Republicans won their primary, runoff and general elections and were sworn into office in January, all vowing to vote for the bill.

The committee “moved universal school choice one step closer to reaching my desk,” Abbott said. “This achievement was truly a team effort. Chairman Brad Buckley and the members of his committee worked around-the-clock to hear public testimony that lasted for nearly 24 hours. I thank them, as well as Lieutenant Governor Dan Patrick, Speaker Dustin Burrows, and Chairman Brandon Creighton, for their tireless work to empower Texas parents and students by providing school choice. I look forward to its swift passage in the Texas House and signing this bill into law.”

Earlier this year, Burrows said the bill would pass. He has joined Abbott at events promoting it, The Center Square reported.

According to a recent poll, a majority of registered voters surveyed in Texas, 63%, support a proposal to create Texas’ first Education Savings Account program, The Center Square reported.

Support exists across multiple demographics. The majority of Black respondents, 69%, white respondents, 62%, and Latino respondents, 59%, support an ESA program open to all students. Likewise, 78% of Republicans, 64% of Independents and 46% of Democrats support it.

A “Texas Trends” survey launched by the University of Houston’s Hobby School of Public Affairs and Texas Southern University also reported similar support. Of the nearly 2,300 Texans surveyed, 69% said they support an ESA program for all parents statewide, The Center Square reported.

“There is across-the-board support, not only across racial and partisan lines, but among urban, suburban and rural voters,” Jim Granato, dean and professor at the Hobby School, said. “Rural residents, and the legislators who represent them, have traditionally joined with urban Democrats to oppose voucher proposals, but we found 63% of respondents in rural and semi-rural areas support vouchers open to all families, along with 64% of suburban residents and 67% of urban residents.”

The ESA bill and other Buckley measures that passed will next go before the full House for a vote.

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House committees: New questions emerge about Democrat fundraising platform ActBlue | National

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www.thecentersquare.com – Morgan Sweeney – (The Center Square – ) 2025-04-03 16:49:00

(The Center Square) – A congressional investigation into online Democratic campaign contribution platform ActBlue is ongoing, with a new report from joint interim staff and a letter to the organization’s CEO requesting additional documents.

The platform aroused Republican suspicions leading up to the 2024 presidential election, with some elected officials raising concerns that Democrats might be using the platform to circumvent campaign finance laws. 

The newly released staff report claims that despite knowing that “both foreign and domestic” actors were using the platform fraudulently, ActBlue executives and staff did not vigilantly work to combat the platform’s exploitation. 

“Twice [in 2024] – once in April and once in September – ActBlue changed its fraud-prevention standards to make them ‘more lenient’” and later “attempted to hide the changes” to avoid looking suspicious, according to the report. 

“For example, ActBlue’s training guide for new fraud-prevention employees instructed them to ‘look for reasons to accept contributions,’ rather than err on the side of flagging suspicious donations,” the report reads. 

Recent news raises additional questions about ActBlue’s ability to comply with relevant federal election and campaign finance laws, according to a news release from the House Judiciary Committee. 

It cites reporting from The New York Times about “at least seven senior staff members, including ActBlue’s ‘highest-ranking legal officer,’” having resigned since late February. 

The chairmen of the Committee on House Administration, the Committee on Oversight and Government Reform and the Judiciary Committee wrote to ActBlue CEO Regina Wallace-Jones for additional documentation regarding ActBlue’s legal compliance.

“ActBlue’s internal turmoil, lack of a functioning legal team, possible retaliatory actions, and failure to take fraud seriously raise a host of new questions about the platform’s ability to deter fraud and comply with legal requirements,” wrote the chairmen.

They asked to receive the documents and schedule two transcribed interviews by April 16.

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News from the South - Louisiana News Feed

Jury deliberations set to begin in monumental oil and gas lawsuit | Louisiana

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www.thecentersquare.com – By Nolan McKendry | The Center Square – (The Center Square – ) 2025-04-03 14:16:00

(The Center Square) – A historic trial that could compel oil and gas companies to pay billions for Louisiana’s coastal wetlands restoration reached its climax this week, with closing arguments delivered Thursday at the Louisiana 25th Judicial District Court in lower Plaquemines Parish. 

The lawsuit, pitting the parish against companies including Chevron USA, Inc., is the first of 42 similar cases filed since 2013 to reach trial, accusing the industry of violating state permitting laws and exacerbating wetlands loss.

Chevron, The Texas Company, Atlantic Richfield Company, ConocoPhillips, and The Louisiana Land and Exploration Company all filed a motion in opposition in 2022 to keep the case in federal court.

After over a decade of legal battles, Plaquemines Parish, led by attorney John Carmouche, is seeking nearly $3 billion in damages. A victory could set a precedent, potentially forcing oil companies to pay tens of billions across all cases — funds legally mandated for coastal restoration. 

The litigation has weathered three attempts by the companies to shift it to federal court, a venue they viewed as advantageous, with the U.S. 5th Circuit Court of Appeals last affirming its return to state court in October of 2022.

“If somebody causes harm, fix it,” Carmouche said in his opening statement. 

The parish alleges decades of unregulated oilfield activity, including canal dredging, devastated its coastline. 

Chevron says it’s being sued for Texaco’s pre-2001 oil and gas work under a 1980 law not meant to cover earlier activities. It also claims the case belongs in federal court since some work tied to World War II was under federal guidance. Chevron acquired Texaco in 2001.

As the jury prepares to deliberate, the outcome could mark a turning point, potentially delivering unprecedented industry accountability for Louisiana’s fading coast—or a major setback for restoration efforts.

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