California’s recently enacted $308 billion state budget included a $100.7 million program for the state to produce low-cost insulin. Of this amount, $50 million is earmarked for product development and $50 million is dedicated to building an in-state manufacturing facility. “Nothing epitomizes market failures more than the cost of insulin. Many Americans experience out-of-pocket costs anywhere from $300 to $500 per month for this life-saving drug,” Gov. Gavin Newsom remarked when announcing the passage of the insulin plan. “California is now taking matters into our own hands.” While it is very unfortunate that Americans pay …
Ridership data and work trends continue to undermine the case for a second BART tunnel
Before the COVID-19 pandemic and the boom in remote work, the San Francisco region’s Bay Area Rapid Transit (BART) was orried about capacity constraints and started planning for a second rail tunnel between Oakland and San Francisco. But, an analysis of ridership data published by BART suggests that the new tunnel, estimated to cost $29 billion, is no longer needed, in part due to the expected long-term changes to travel patterns induced by COVID-19. To its credit, BART publishes hourly station entrances and exits by station pair on its website. For each hour, the data …
Pension Reform News: Comparing different pension plans, CalPERs reports negative returns and more
This newsletter from the Pension Integrity Project at Reason Foundation highlights articles, research, opinion, and other information related to public pension challenges and reform efforts across the nation. You can find previous editions here. In This Issue: Articles, Research & Spotlights Who benefits most from defined benefit and defined contribution plans?California’s public pension losses will impact local governments.A new survey suggests retirement plans are poor tools for recruitment and retention.More transparency is needed on public pensions’ private equity investments. News in Brief Quotable Quotes on Pension Reform Data Highlight Articles, Research & Spotlights Examining the Populations Best …
The potential consequences of New Zealand’s plan to be smoke-free
New Zealand’s plan to be smoke-free by the year 2025 is ambitious, with a raft of policy proposals hitherto untested in the rest of the world. The plan’s key planks include: Removing 95 percent or more of the nicotine from cigarettes.Slashing the number of retailers that can sell tobacco by 90-to-95 percent.Criminalizing the sale of tobacco to people born in 2009 or later. While yet to be passed into law, the New Zealand policy is under consultation and will no doubt be the subject of intense discussion among stakeholders, policymakers, and the general public. The …
Best practices for cost-of-living adjustment designs in public pension systems
Gold Standard in Public Retirement System Design Series Inflation’s impact on the purchasing power of retirement benefits and savings needs to be managed when designing and funding effective retirement plans. Periods of high inflation show how important properly designing inflation protection measures is in public sector defined benefit (DB) pension plans. These plans have addressed this dilemma in different ways over the years with varying degrees of effectiveness. More recently, public sector pension reform efforts have often significantly changed how cost-of-living adjustment (COLA) and post-retirement benefit increase (PBI) features are designed and funded. This brief …
The criminal justice system is failing people suffering from mental illnesses
Nationwide, a significant portion of jail and prison inmates suffer from mental illness. In many cases, these individuals cycle in and out of the criminal justice system without receiving appropriate care and consideration for their particular needs. Consequently, people with mental illnesses are more likely to re-offend, re-enter the criminal justice system, and have violent encounters with law enforcement. The status quo is failing people struggling with mental illness and it also results in reduced public safety and wasted taxpayer dollars. However, some states and municipalities are implementing interventions within courts, the community, and correctional …
Surface Transportation News: Quantifying the value of Interstates, Texas HOV lanes, and more
In this issue: New study quantifies value of Interstate highwaysSpurious objections to Maryland’s express toll lanesTexas returns to HOV lanesFRA re-proposes flawed crew-size mandateAutonomous trucks making progress—but aren’t quite there yetAre highway workers “pedestrians”?News NotesQuotable Quotes New Study Quantifies Value of Interstate Highways Economists over the years have used various methods to estimate the economic benefits of highways, especially the Interstate Highway System, which introduced a nationwide system of limited-access super-highways comparable to Germany’s autobahns and Italy’s autostrade. As econometric methods become increasingly sophisticated, it’s not surprising that recent years have brought forth new, improved …
Retirement plans’ impact on recruiting and retention in the public market
State and local pension systems, along with allies in public employee unions, have presented as fact their opinion that traditional pensions aid the recruiting and retention of highly qualified employees. While statistical evidence supporting this conclusion is questionable, proponents have continued this promotion. In doing this, they have not promoted retirement plan designs that might actually serve to support recruiting and retention goals while better meeting employee needs. The MissionSquare Research Institute, along with the International Public Management Association for Human Resources (IPMA-HR) and the National Association of State Personnel Executives (NASPE), conducts an annual …
How inflation could impact public school finances
For the private sector, inflation and the rising cost of living are swallowing up the wage growth that some workers experienced during the COVID-19 pandemic. Many businesses have been bracing for reduced demand and a recession. For the public sector and public schools, in particular, the implications of inflation aren’t as clear cut but they are just as problematic. As Governing’s Girard Miller pointed out, most state and local government revenue sources are inflation elastic, meaning that they automatically respond to inflation. Because income and sales taxes are usually anchored to percentage rates, increases in taxpayers’ …
Top-performing public schools are rejecting students even though they have open seats
During the pandemic, K-12 public schools experienced massive enrollment drops as families opted for private schools, learning pods, or homeschooling. Despite regaining some students, 1.2 million seats remain empty in public schools nationwide. In some cases, this means that top-performing school districts now have swathes of open seats. For instance, the New York Times reported last month that Orange County’s Capistrano Unified School District — an A-ranked school district in the state — has lost more than 2,800 students since 2020. Enrollment decline isn’t unique to California. According to the American Enterprise Institute’s (AEI) Return to Learn Tracker, Kansas City’s top-performing Olathe Public Schools District lost …
The FDA’s deadly menthol miscalculation
America is headed in the right direction, if only when it comes to smoking. After decades of decline, cigarette use among adults is lower than ever and practically nonexistent among youth. But that is not good enough for some government officials who are pushing a series of radical policies aimed at forcing the public to hasten its march toward a smoke-free (and now also nicotine-free) society. The closest of these efforts to becoming reality is a proposed rule from the U.S. Food and Drug Administration (FDA) that would outlaw menthol cigarettes nationwide by 2024. Based …
California’s public schools are losing kids while getting more money
Some of the spending in California’s record-breaking $308 billion budget seems to be an attempt to slow down the number of people fleeing the state. During the height of the COVID-19 pandemic, California saw the highest net outflow of residents in the country, losing 300,000 residents between April 1, 2020, and July 1, 2021. Florida and Texas, together, gained over 625,000 residents during that period, according to Census data. Meanwhile, the latest Census metrics show that Los Angeles, San Francisco, and San Jose lost more than 120,000 residents combined in 2021, joining New York City …
