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Jacksonville’s public pension reform helps the city get an improved credit rating 

In Politics by Michael Rae

The city of Jacksonville is about to enjoy the benefits of a credit rating boost. Moody’s Investors Service moved the Florida city’s credit rating to Aa2 from Aa3, citing pension reform among the main reasons for the upgrade. The credit rating increase will allow the state to borrow funds at a lower interest rate and invest in more infrastructure and public services.  Five years ago, the Jacksonville City Council approved a pension reform package while enacting innovative changes, reducing debt by more than $585 million and adding over $155 million to pension reserves. A key element of the pension …

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Shifting away from gas taxes to modernize Interstate highways

In Politics by Michael Rae

What if there’s a way for states to jump-start the needed rebuilding and modernization of major highways by embracing long-term design-build-finance-operate-maintain (DBFOM) revenue-risk public-private partnerships (P3s)? I suggested such an opportunity at the International Bridge, Tunnel & Turnpike Association’s (IBTTA) Road User Charge and Transportation Finance Conference in May. The opportunity comes about because the United States, over the next several decades, will need to shift from per-gallon fuel taxes to mileage-based user fees (MBUFs), which are typically called MBUFs in the eastern U.S. and road user charges—RUCs—in the west. This need to replace gas …

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How President Biden’s plan for student loan forgiveness will make student debt worse

In Politics by Michael Rae

Many of the 43.3 million Americans with federal student loan debt totaling $1.61 trillion have anxiously anticipated President Joe Biden’s decision about student loan forgiveness.  Last week, The Washington Post reported that the president’s plan, which sources say is nearing a formal announcement, will resemble his 2020 campaign promise to forgive $10,000 in federal student loans per borrower. The Committee for a Responsible Budget estimates this will cost taxpayers $230 billion. While political firebrands such as Sen. Bernie Sanders have long supported substantially increasing federal higher education spending, including offering things like free college, President …

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Consumers say price and availability are barriers to choosing legal cannabis products over illicit products

In Politics by Michael Rae

Reason Foundation recently published an analysis of California’s legal cannabis market and how prices and availability impact consumers/ decisions about whether to purchase legal or illegal marijuana.  California launched its legal cannabis market in Jan. 2018, but the illegal market continues to dominate the legal one. Cannabis is subject to an array of taxes assessed at the state and local levels and these taxes create a price disparity between legal and illegal marijuana products that are otherwise similar in nature. Moreover, illegal and unregulated supply chains are firmly established across California whereas legal supply chains for cannabis …

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Major Florida legislation improves the state’s default defined contribution plan

In Politics by Michael Rae

Nearly seven months after Florida Gov. Ron DeSantis released his “Freedom First Budget” recommending an improved defined contribution retirement benefit for teachers and most public employees statewide, House Bill 5007 (HB 5007), which grants a 3% benefit increase to all active plan members, is now law. Over 180,000 educators, administrators, and other government workers participating in the default Florida Retirement System Investment Plan are slated to receive the additional 3%, effective July 2022. With this move, Florida continues to demonstrate its commitment to maintaining a retirement system that works for both taxpayers and public workers. …

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Task Force Pineapple co-founder Scott Mann receives 2022 Savas Award

In Politics by Michael Rae

Task Force Pineapple co-founder Scott Mann, whose efforts led to the rescue of more than 1,000 Afghan nationals after the United States military withdrew from Afghanistan last year, is the seventh annual recipient of the Savas Award for Privatization. The award was presented by Reason magazine Editor in Chief Katherine Mangu-Ward in Washington, DC, on June 2. Mann’s remarkable leadership shows how private actors can take initiative to solve real-world problems and provide life-saving humanitarian support. Mann co-founded Task Force Pineapple, a network of former Navy SEALs, Green Berets, and other intelligence professionals, that refused …

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Annual Privatization Report 2022 — Transportation Finance

In Politics by Michael Rae

Introduction Since the late 1980s, governments have privatized many state-owned enterprises, including infrastructure such as airports, electricity, gas, railroads, seaports, telecommunication providers, and toll roads. Some of these facilities were sold to investors, in whole or in part (as is the case with many European airports). In other countries, public infrastructure facilities were leased to investors under long-term public-private partnerships (P3s). Thereafter, a growing number of governments also used such P3s to finance, build, and operate new airports or airport terminals, electricity facilities, seaports, and toll roads. The sale or lease of an existing facility …

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Can the next mayor of LA help the city’s failing school district?

In Politics by Michael Rae

As we near the primary election and the field of mayoral candidates shrinks, issues like crime and homelessness are dominating the race. Unfortunately, the mayoral candidates’ discussion of K-12 education in Los Angeles has largely been limited to public safety issues. While the mayor has limited power over the Los Angeles Unified School District and other districts within city limits, voters make it clear they closely associate the mayor with the successes and failures of public schools. A February poll by Great Public Schools Now, for example, found that 85% of registered voters say the …

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The FDA’s proposed ban on menthol cigarettes is based on faulty claims

In Politics by Michael Rae

The war on smokers is hurtling toward one of its logical conclusions. The U.S. Food and Drug Administration recently announced a plan to ban menthol cigarettes. But, the move raises a variety of public policy questions. For example, with menthol cigarettes accounting for only around one-third of U.S. cigarette sales, why is the FDA banning menthol products while leaving most of the rest of the cigarette market untouched? And what consequences could follow such a prohibition of menthol products? The FDA makes three claims as to why menthol is uniquely dangerous. First, FDA contends menthols …

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Proxy battles are usually an inefficient use of public pension systems’ resources

In Politics by Michael Rae

Viewers of Berkshire Hathaway’s 2022 Annual Meeting recently learned that some public pension funds feel strongly about how the corporations they own stock in should be governed. At the Berkshire meeting, a group of three pension systems offered a series of shareholder resolutions, all of which were rejected. While there may be instances where it is reasonable for public pension funds to try to influence corporate decision-making, the pension funds should determine whether proxy fights can appreciably enhance the value of their assets before picking a fight. Each year, publicly held corporations send proxy materials …

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How states and schools can provide students more transportation options

In Politics by Michael Rae

Across the country, school bus driver shortages are limiting transportation services in public school districts and straining families. Adding to these challenges is the fact that as charter schools and public school open enrollment options continue to grow, so will the distance students travel to get to the school of their choice. Without viable transportation options, some families can’t reap the benefits of school choice even if they want to. States can pass laws to allow students to enroll in public schools outside of their zip codes — but those opportunities are meaningful only if families can afford to …