Government

BSED Outlines 2021 Legislative Goals

19 November 2020
Evelyn Pyburn
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The next session of the Montana State Legislature is scheduled to begin on Jan. 4, 2021.

Prior to each legislative session, organizations of all sorts usually announce their legislative priorities – those issues, policies and proposals, for which they plan to lobby or support.

Yellowstone County’s economic development agency, Big Sky Economic Development (BSED) is among the many that have announced their list of priorities going into the next legislative session. The agency, which administers both Big Sky Economic Authority and Big Sky Economic Corporation, has identified a broad range of issues at both the state and local level that it considers important.

BSED’s legislative priorities at a local level parallels those at the state level, and includes the goal of Yellowstone County to change state law to allow more flexibility in establishing long-term leases of county properties, which might better encourage private business investment.

BSED’s goals include supporting the continued funding of Medicaid which will bolster local and regional healthcare providers.

They will also stand behind any proposed funding of Montana State University-Billings, including what has been identified as a need for investment in the health care and science professions.

BSED wants to Protect Tax Increment Financing, saying that “urban renewal and target economic development districts need to be supported as one of the few economic development tools available to support the redevelopment of our downtown core and to build infrastructure that supports the growth of value-added industry.”

BSED’s legislative priorities include endorsing the goals of the Montana Economic Development Authority and the Montana Chamber of Commerce’s “Next Generation of Community and Economic Development Tool Analysis,” which is essentially a number of funding proposals and laws that will empower agencies to develop programs and projects.

The priorities include reorganizing the state’s economic development programs and subsidies for job creation. They also advocate for a reorganization of the Department of Commerce and the Governor’s Office of Economic Development.

They want to fund incentives for recruiting and retaining workers in Montana and to encourage entrepreneurship.

The priorities include support for a statewide strategy to improve broadband accessibility, and revenue to support investment in 5G networks.

And they want the state legislature to explore funding sources to help advance economic development programs and projects to be created in future legislative sessions – laws which would enable government funding of “infrastructure and community development assets.”

To explore options for affordable daycare and programs supporting “workforce” housing, were other issues of interest that might come forward in the next state legislature, about which BSED would be supportive.

Gray Wolf Delisted from Endangered Species

18 November 2020
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The Department of the Interior announced it has removed the gray wolf from the endangered species list, signaling a successful recovery under the Endangered Species Act (ESA). The gray wolf spent more than four decades on the endangered species list. The population is now thriving in the lower 48 states.

“This should be heralded as a success story of the Endangered Species Act,” noted Montana Farm Bureau Executive Vice President John Youngberg. “The gray wolf in Montana has already been delisted and state and tribal management is working well. When the numbers required by a scientific study are reached, it’s time to delist that species. In the case of the gray wolf, those states where they have already been delisted are managing the species well, limiting conflict with livestock and keeping a check on the reduction of wildlife numbers—yet still have the species thrive.”

State and tribal wildlife management agencies will now be responsible for the management and protection of the gray wolf.

“This is an Endangered Species Act success story,” said American Farm Bureau Federation President Zippy Duvall. “The gray wolf joins more than 50 other animals, including the bald eagle, as an example of how careful management and partnerships between federal and state agencies can result in the successful recovery of a once-threatened species. The gray wolf population is now thriving so it is appropriate to turn management over to the states, which can oversee the species in a way that is most appropriate for each region.”

Over 1,600 species remain on the federal threatened and endangered list. Delisting the gray wolf allows the Department of the Interior to focus resources on other species in need of recovery.

Ronda Wiggers to Head Montana NFIB

10 November 2020
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Ronda Wiggers has been announced as the new state director or the Montana Federation of  Independent Business, (NFIB) a small-business advocacy association. She will be in charge of lobbying, educational outreach and political efforts.

Wiggers will be taking up the torch for Riley Johnson who has served in that position for 38 years.

“Ronda’s lobbying experience combined with her grassroots organizing abilities made her an ideal fit for the job,” said Gary Selvy, executive director of state public policy for NFIB. “Our main educational mission for the 77 years of our existence, and all that entails, is to instruct and remind state and federal policymakers that small businesses are not smaller versions of big businesses and do not always benefit — and are more often harmed — from one-size-fits-all laws, rules, and regulations. As a small-business owner herself, Ronda fundamentally understands that, and, given her grassroots organizing abilities, can drive home the point with more emphasis.”

A native Montanan, Wiggers was raised on a farm in the heart of the state’s Golden Triangle. She attended the University of Montana, has held local elected offices, and is very active in her community.

“Since the time I first became actively involved in politics and policy,” said Wiggers, “NFIB has always had a stellar reputation in Montana, and I attribute that to the man I will be replacing. I’m honored to take the hand-off of the torch for Main Street, mom-and-pop enterprises that are the engine of every economy in the world. I’m looking forward to getting started working on small-business issues when the 2021 session of the Montana Legislature commences.”

Added Selvy, “It was with equal feelings of delight in getting someone of Ronda’s caliber to join our team and sadness in losing a great friend and mentor in Riley Johnson, who for 38 years has been the voice of small business in Montana. So much can be learned about someone in those unguarded moments, and when Riley and his fellow state directors would gather at a conference, I would always notice how they delighted in seeing him and valued his wise counsel on difficult issues they were dealing with back in their states.” 

Rich States, Poor States – Montana in Middle

10 November 2020
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With its founders and researchers, “united in free markets and limited government,” the American Legislative Exchange Council (ALEC) has come out with results of two studies that show Montana is about middling when it comes to economic prospects and the performance of its governor. And, the authors make frequent points that one ranking might have a lot to do with another.

Montana Governor Steve Bullock scored but 3 of a possible 5 stars and ranked 24th among the 50 governors of the country in the first ever ALEC Governors ranking of the 2020 Laffer-ALEC Report on Economic Freedom. The scorecard ranks governors based on policy performance and result, as well as executive leadership before and after the start of the COVID-19 health crisis.

At the beginning of September the study ranked Montana as 48th in the number of COVID deaths per 1 million population… only Alaska, Wyoming and Hawaii had a ratio of fewer deaths. New York, New Jersey and Massachusetts had the most. Montana also had one of the lowest unemployment rates in the nation.

The ranking shows that good management and balanced budgets have significantly helped states like Texas, Georgia and South Dakota, the governors of which earned five stars.

In their Rich States Poor States ranking, Montana’s best score was 15th in economic performance. Montana comes in 33rd in projecting economic outlook —  six levels higher than last year and the score shows an over-all upward trend from 43rd in 2015. Montana ranked 24th in terms of State Gross Domestic Product , 15th in Absolute Domestic Migration, and 18th in Non-Farm Payroll.

The Economic Outlook Ranking is a forecast based on 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process, emphasized the authors. Generally speaking, states that spend less — especially on income transfer programs — and states that tax less — particularly on productive activities such as working or investing — experience higher growth rates than states that tax and spend more.

The authors of the studies include Jonathan Williams, ALEC Chief Economist and Executive Vice President of Policy, who founded ALEC Center for State Fiscal Reform in 2011. He co-authors Rich States, Poor States: ALEC-Laffer Economic State Competitiveness Index with Reagan economist Dr. Arthur Laffer, Stephen Moore and Bill Meierling.

The numbers that help Montana’s standing include the impacts of not having a sales tax. The state is also bolstered by the fact that Montana has no estate or inheritance tax. The ranking is also bolstered by having a low level of debt at 4.6 percent, which taxpayers would otherwise have to be looking at repaying.

These positives are outweighed to a great extent by the fact that Montana’s other taxes are relatively onerous with rankings such as 33rd for top marginal personal income tax rate; 25th which reflects an increase of $18.12 per $1000 of income; or Top Marginal Corporate Income Tax Rate; 37th for Property Tax Burden which is $35.39 per $1000 of personal income. Montana ranks 32nd in terms of the number of public employees per 10,000, at 538.3.

And, Montana gets dinged as being dead-last, for not being a right-to-work state, and it sinks to 34th for not having tax expenditure limits.

Ranking first in economic performance is Utah, which has ranked in first place for 13 years in a row.

Utah is followed by Wyoming and then Idaho.

At the bottom is California, Illinois and New Jersey, Vermont, with New York dead last.

The authors said that they would like to see more states immolate the management policies of Utah, South Dakota or Wyoming. Among the common themes of the states at the top of their ranking is having balanced budgets and being “right to work states.”

So how has Utah maintained top ranking for 13 year? “A lot goes into that,” said Jonathan Williams, “They have kept a disciplined approach to budget and spending. They created a flat tax from a graduated income tax system, and they made innovative property tax reform… And, finally – something the bond agencies point to – they have prepared for the eventuality that the federal government may not keep up their matches on programs.”

“Another story is Wyoming which is No.  2 —  moving up eight spots.” It is unique in that it is one of two sates that does not have a personal income nor a corporate tax.

Idaho is No. 3.  Indiana is No. 4 and North Carolina is No. 5; both states ten years ago were “in the middle of the pack,” but because of cutting taxes and government reformed they have moved up.”

Ranking 6, 7, and 8 is Nevada, Florida and Tennessee – all states without personal income taxes.

New York has ranked 50th for seven years.

“It is interesting to see [Governor Andrew] Cuomo begging people to return to New York after years of chasing them away,” commented Williams.

Other low rankers are Vermont, Illinois, California, Minnesota, Hawaii, Minnesota and Maine – “states that have the biggest pension liability and the ones most lobbying for a federal bailout — a dangerous idea for federalism.”

Pointed out Steve Moore, there are states that want the federal government to grant them a total of some $750 billion to bail them out of deep debt. “It is unfair to states like Iowa, Idaho and Utah who have balanced their budgets.”

“The COVID crisis has “exposed the states who did not save for a rainy day,” said Jonathan Williams.

While it is noteworthy that many of the states that perform well are states without income taxes, Art Laffer pointed out that Washington  state ranks 37th and it has no income tax – “so that tells you other things matter.”

“When you look at the bottom states, they have the highest tax rates, and then they are doubling down on that,” said Laffer, “….if you look at ten year averages it fits just like a glove on a hand.”

The Rich States Poor States study has been reported for 14 years, and over that time it’s become evident that “income tax rates do have a significantl affect, in fact it is indisputable at this point given what is happening ,” said Steve Moore..

“Looking at U-Haul data, shows the continuation of the trend,” he said, pointing out that there is a consistent migration out of the high-tax states like New York, New Jersey and Rhode Island.

Another example: “Illinois it is a catastrophe . It is so mismanaged … they have a massive unfunded liability in their pension benefits. … these states have put themselves in a big, big hole,” said Moore.

Art Laffer commented on the devolution of New Jersey which in 1965, with neither an income tax nor a sales tax was performing so well economically it was considered a “growth miracle.” But now, “They have flipped completely,” continued Laffer, pointing out that New Jersey has high gift and estate taxes and an inheritance tax.

Weighted down with unfunded government pension programs is one of the greatest problems confronting states that are underwater. “Unfunded pensions are future tax increases,” warned Laffer, and New Jersey has some of the highest unfunded pensions in the US. A prospective business person “sees a sees “a very toxic business environment waiting to hit in the future.”

Pointing out that it is not uncommon for income tax increases to be advanced with the argument that they bring income equality, Steve Moore interjected, “Guess what states that have the greatest income inequality like California, New York or New Jersey, have the highest income inequality.”

$1 Million in Business Development Funds

9 November 2020
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Eight businesses are receiving $1,050,260 in business development funding through the Montana Department of Commerce. It is estimated that the funding will support the creation of up to 136 jobs and train new workers at growing businesses in Montana.

Funds will be awarded through two reimbursement programs at the Department of Commerce: The Big Sky Economic Development Trust Fund (BSTF) and the Primary Sector Workforce Training Grant (WTG). The two grant programs provide reimbursements to local and county governments and economic development organizations on behalf of businesses for creating good-paying jobs in Montana and training Montanans to fill those jobs.

The following organizations will receive funding for creating jobs and training new workers:

—Big Sky Economic Development Authority will receive up to $66,600 on behalf of Belle Chemical, LLC in Billings, which estimates it will create 18 jobs. Funds will be used to purchase construction materials, equipment and for wage reimbursement. Belle Chemical also will also receive $90,000 from the Primary Sector Workforce Training Grant program to train workers to fill the newly created jobs. Belle Chemical LLC is a chemical manufacturer and packager of consumer products intended for sale online.

—Big Sky Economic Development Authority will receive up to $49,000 on behalf of Wyo-Ben, Inc. in Billings, which estimates it will create 10 jobs. Funds will be used to purchase construction materials, equipment, furniture, fixtures, for lease rate reduction and for wage reimbursement. Wyo-Ben, Inc. is leading producer of Wyoming bentonite clay-based products. The company will be creating another division for bulk commodity cat litter.

—City of Bozeman will receive up to $170,000 to assist XY Planning Networking LLC, which estimates it will create 34 jobs. The grant funds will be used to purchase equipment and for wage reimbursement. XY Planning Network LLC is the leading organization of fee-only financial advisors who specialize in working with Gen X and Gen Y clients, offering comprehensive resources to help financial planners run better and more successful businesses.

—Fergus County will receive up to $70,500 on behalf of Big Sky Processing, LLC in Lewistown, which estimates it will create 15 jobs. Funds will be used to purchase of equipment and for wage reimbursement. Big Sky Processing, LLC will also receive $75,000 from the Primary Sector Workforce Training Grant program to train workers to fill the newly created jobs. Big Sky Processing, LLC will be establishing a U.S. Department of Agriculture-inspected mobile meat processing unit in Fergus County.

—Lake County will receive up to $150,000 on behalf of Rocky Mountain Twist Corporation in Ronan, which estimates it will create 20 jobs. Funds will be used to purchase equipment. Rocky Mountain Twist Corporation will also receive $95,480 from the Primary Sector Workforce Training Grant program to train workers to fill the newly created jobs. Rocky Mountain Twist Corporation is a manufacturer of power tool accessories, primarily drill bits, for the retail and industrial markets.

—Missoula County will receive up to $95,000 on behalf of UNAVCO, Inc. in Missoula, which estimates it will create 19 jobs. Funds will be used to purchase equipment and furniture, for lease rate reduction, for wage reimbursement and for equipment relocation. UNAVCO, Inc is a global leader in engineering and data handling for geophysical and environmental sensors.

—Sanders County will receive up to $88,800 on behalf of Agriculture Resource Management, Inc. dba AquaPrawnics, Inc. in Noxon, which estimates it will create 12 jobs. Funds will be used for wage reimbursement. Agriculture Resource Management, Inc. dba AquaPrawnics, Inc. will also receive a $53,030 grant from the Primary Sector Workforce Training Grant program to train workers to fill the newly created jobs. Agriculture Resource Management Inc. dba AquaPrawnics is positioned to become the largest indoor shrimp farm producer.

—Wausau Supply Company will receive up to $46,850 through the Primary Sector Workforce Training Grant Program to train eight new workers. Wausau Supply Company distributes building materials for the industry’s leading manufacturers to authorized retailers from the Great Lakes to the West Coast and is looking to establish a distribution center in Butte.

The next application deadline for the Big Sky Trust Fund Grant Programs is December 16, 2020. In addition, Montana businesses are now eligible to apply directly for workforce recovery grant dollars to help companies refill jobs that were lost due to the economic impacts of the COVID-19 pandemic. The Montana Department of Commerce has launched a temporary Workforce Recovery grant program as part of the Big Sky Economic Development Trust Fund (BSTF). The deadline to apply to this temporary program is December 31, 2020.

Court Allows States to Waive SNAP Regulations

9 November 2020
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The Center Square

The U.S. District Court for the District of Columbia has blocked a Trump administration change to the Supplemental Nutrition Assistance Program (SNAP) that could have removed eligibility for almost 700,000 unemployed, able-bodied Americans.

A lawsuit filed in January by a multistate coalition alleged a U.S. Department of Agriculture (USDA) rule wrongly reversed a decades-old policy that allowed states to waive SNAP work requirements. The previous rules granted waivers for larger geographic areas by lumping certain regions with lower unemployment with locations registering higher unemployment, as well as carryover unused exemptions.

To increase workforce participation, Congress in 1996 amended SNAP benefits to limit disbursements to “Able-Bodied Adults Without Dependents” (ABAWD), defined as unemployed individuals ages 18-49 who are not disabled or raising minors. SNAP funds were restricted to three months within three years unless subjects are employed for a minimum of 20 hours per week.

But the law granted states the ability to request waivers for that time limit if the state or part of the state had an unemployment rate above 10%, or did not have a sufficient number of jobs to employ SNAP recipients.

The new rule attempted to revise state discretion for waivers due to economic conditions, define geographic scope waivers, and require the state to rely on the entire population’s unemployment instead of employment for ABAWD.

Critics of the geographic waiver requirements point out that past regulations required the USDA to average different regional unemployment rates so more people receive the waiver, even in regions that are below the unemployment benchmark.

“Geographic-area waivers of work requirements for people who receive food stamps are based on the flawed premise that when the unemployment rate in a given area exceeds a certain level, even in a national economic boom, able-bodied people in that area should not be expected to look for work, whether in that area or in a neighboring city or county,” Jamie Hall, a senior policy analyst in empirical studies at The Heritage Foundation, said.

Hall said that ABAWD work requirement exemptions by geographic waivers account for about double the SNAP caseload expected.

“Geographic waivers are not needed to protect vulnerable citizens’ access to food. Other provisions exist or are available to give states the flexibility they need to provide exemptions from the work requirement for people facing difficulties,” Hall said.

Chief Judge Beryl Howell noted “the backdrop of the pandemic has provided, in stark relief, [the] procedural and substantive flaws” of the rule change.

Within two months of the start of the pandemic, more than 6 million Americans enrolled in SNAP.

The court observed USDA was “silent” on how many of enrollees wouldn’t be eligible for SNAP benefits as a result of USDA’s proposal.

The Administrative Procedure Act requires agencies to offer explanations for changing long-held policies, but the court found the waiver changes were “arbitrary and capricious.”

“SNAP was specifically created to help Americans struggling with food insecurity and as we continue to navigate this pandemic, this assistance is more important than ever,” Michigan Attorney General Dana Nessel said in a statement.

“Instead of helping Americans at a time when so many are facing hardships, the Trump administration chose to cruelly revoke vital food assistance that thousands of Michigan residents rely on. This is an important victory in favor of human decency.”

During the COVID-19 pandemic, Michigan’s SNAP rolls surged $126 million from February to May.

The federal government pays the full cost of SNAP benefits but splits administration costs evenly with the states.

The court ruled that USDA’s change violated the federal rulemaking process, and vacated the rule in its entirety.

City of Billings Approves TEDD Agreement

6 November 2020
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With two dissenting votes, the Billings City Council approved, on Monday, an amendment to the agreement the city has with Lockwood Water and Sewer District (LWSD) that paves the way for the LWSD to expand its sewer district boundaries to provide service to property owners in the TEDD in Lockwood. The amendment allows the expansion without requiring the property owners to sign waivers to protest any future annexation proposals, which became a point of contention over a year ago.

The agreement imposes an 18 percent surcharge for the property owners of the TEDD (Targeted Economic Development District) for any treatment of sewage they get from the city, and makes clear that the agreement in no way impacts negotiations for any future need for water that Lockwood might have. It was also accompanied by a letter from Yellowstone County Commissioners committing themselves to cooperation with the City of Billings in planning future land use restrictions at the city boundaries, said City Administrator Chris Kukulski.

The action paves the way for the development of the TEDD in the most environmentally desirable manner possible, as an industrial park which it is hoped will entice new businesses to the area. That Billings providing sewage treatment is the most desirable way for development to happen — which is sure to happen with or without the agreement — was mentioned as a significant reason for their supportive vote by some of the council members, while others in opposition said they believed that the city was being short changed, since the 18 percent surcharge will generate only $24,000 annually in extra revenue, according to Kukulski. City staff said that the justification for the surcharge is for the additional risk the city faces in meeting regulatory requirements of the Department of Environmental Quality.

LWSD Manager, Mike Ariztia, explained that the next steps involve getting approval of the LWSD board, which earlier rejected a draft proposal because of changes it made to the basic contract they have had with the city for the past 12 years. Ariztia noted that the board had questioned why the issue of future water supplies should be included in an agreement about sewage. LWSD functions as two districts – -a sewer district and a water district. Kukulski said that he thought that mention of it was important because in the past there seemed to be people who believed that promises had been made about future agreements that were not written down. He wants to make sure that no such confusion exists in the future.

Ariztia further explained that once the LWSD board accepted the amendment, a process would be initiated to legally include, within its boundaries, the area which was analyzed for the establishment of the TEDD, which would include properties that are not currently part of the TEDD but could be in the future. That process requires the approval of a majority of the TEDD property owners and the acceptance of the LWSD board.

The agreement with the city also reduces by half, a million dollar bond that the city required of LWSD 12 year ago when they entered into their agreement to guarantee performance. Kukulski said that he believed that the district has demonstrated their viability and the reduction is appropriate.

US Not so Competitive When It Comes to Taxes

22 October 2020
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The Tax Foundation has released the latest edition of its International Tax Competitiveness Inc. which shows that the US ranks only 21st in the developed world for tax competitiveness.

A well-structured tax code is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities. In contrast, poorly structured tax systems can be costly, distort economic decision-making, and harm domestic economies, explains the Foundation. 

While the U.S. tax system has become more competitive in recent years, it still ranks in the bottom half of developed countries and behind what are often considered high-tax countries like Sweden (#7) and regional competitors like Canada (#18) due to several uncompetitive features:

* A progressive individual income tax with a top rate of 46 percent, including payroll and personal income taxes.

* A partial territorial system that doesn’t exempt foreign capital gains income (one of the most onerous international tax systems of any OECD nation).

* Among the strengths of the U.S. tax system is the allowance of full expensing for business investments in machinery; however, that is set to expire soon.

Unfunded Retirement Systems Will Cost

22 October 2020
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The Center Square

Only one in five of the 143 largest statewide public retirement systems in the U.S. are resilient, a new analysis published by the bipartisan nonprofit Equable Institute shows.

Public sector funding peaked in 2001, with nearly 3 out of 4 statewide plans 90 percent funded or better. By 2020, one in five statewide plans have a “resilient funded” status.

[Montana’s retirement funds for teachers and for public employees face a $4.5 billion shortfall, according to legislators serving on a special committee that met last January to discuss the problem in Billings. The Montana Teachers Retirement System (MTRS) and the Montana Public Employees Retirement System (MPERS) have reached this state of affairs primarily because of overestimating the rate of returns on the state investment fund from which future retirement benefits are paid. They said that they expect that the problem will have to be addressed during the next state legislative session.]

The report, “State of Pensions 2020,” analyzes trends in public pension funding, investments, contributions, cash flow and maturation of retirement systems that had more than $1 billion in assets through 2019.

The current estimated funded ratio for 143 statewide plans is 67.9 percent, near the lowest point in modern history. And five states – California, Illinois, New Jersey, Pennsylvania and Texas – account for more than 50 percent of unfunded liabilities.

The institute, which works with public retirement system stakeholders to solve complex pension funding challenges, found that nationally, public pension funding has been in decline since 2001. Despite the decade-long bull market, the recession following coronavirus shutdowns leave them in a worse position than the Great Recession did.

State and local public employee retirement systems in the U.S. manage over $4.3 trillion in public pension fund investments, according to Pew Charitable Trusts. Returns on these assets account for more than 60 cents of every dollar available to pay promised benefits, it found in a December 2019 report.

“About three-quarters of these assets are held in what are often called risky assets – stocks and alternative investments, including private equities, hedge funds, real estate, and commodities,” the Pew report said.

Research by The Pew Charitable Trusts found that since the Great Recession, public pension plans have lowered return targets in response to changes in the long-term outlook for financial markets. Pew analyzed the 73 largest state-sponsored pension funds, which collectively manage 95 percent of all investments for state retirement systems. The average assumed return for these funds was 7.3 percent in 2017, Pew found, down from over 7.5 percent in 2016 and 8 percent in 2007 just before the downturn began.

“The pension asset shortfall for statewide plans keeps growing,” the Equable Institute report states. “At the end of 2019, there was no net recovery from losses during the Great Recession and Financial Crisis.”

The institute estimates that unfunded liabilities will grow to $1.62 trillion in 2020, up from $1.35 trillion in 2019, and from $1.16 trillion in 2009.

“One of the most concerning findings from the report is a trend toward rapidly expanding net negative cashflows, as a result of plan maturation,” the report states.

“Although contribution rates have progressively increased (a positive trend from the perspective of plan funding), benefit payments are also growing steadily (because of increased retirements), resulting in a net negative cashflow of -$113 billion for 2019,” it continues.

Because the trend has steadily worsened since 2009, the institute says it will be increasingly difficult for governments to invest their pension plans back to health.

If assumed returns had kept pace with declining interest rates since 2001, the institute analysis says, average assumption in 2019 would have been around 5.1 percent. In 2020, the average assumed rate of return is 7.2 percent.

“We estimate the average investment return for statewide plans as of June 30, 2020 is -0.44 percent based on the most recent asset allocation reports from each plan,” the institute says. “This is 763 basis points below the average 7.19 percent assumed return for the fiscal year.”

The report also analyzed unfunded liabilities relative to state GDP and found that states with some of the most visible pension funding challenges, including New Jersey, Kentucky and Illinois, have the largest share of unfunded liabilities relative to their state’s GDP, topping 15 percent, respectively.

Supreme Court Halts 2020 Census

22 October 2020
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The U.S. Supreme Court on Oct. 13 stopped the 2020 Census head count in response to a request from the Trump administration, handing a blow to a coalition of local governments and civil rights groups that filed suit.

The coalition sued to stop the census count from ending Sept. 30, which the Trump administration had planned in order to meet a deadline stipulated by law. U.S. District Judge Lucy Koh ruled that the count could continue through Oct. 31, which the Trump administration appealed to the U.S. Supreme Court and won.

The administration argued the count needed to end immediately in order for the U.S. Census Bureau to have enough time to tally the numbers before a congressionally mandated Dec. 31 deadline. Counting and compiling all the data is necessary to accurately determine the number of congressional seats apportioned to each state based on population totals.

The U.S. Census Bureau argued before the court that it had already counted 99.9 percent of households in the U.S. in 2020. But census takers have raised concerns about the quality of the data being collected, and the American Statistical Association released a report Tuesday expressing similar concerns.

Their report, written by a task force of former Census Bureau directors and others, raises concerns about the shortened head count schedule, pending lawsuits and other issues. The task forces argues that outside experts should be given access to the data to help analyze its quality before it is used to determine congressional seats. They also recommended that federal law governing the census be reevaluated.

Results of the door-knocking phase of the 2020 census this year are similar to those received from the 2010 Census, Al Fontenot, an associate director at the Census Bureau, said in court papers. Nearly 24 percent of responses resulted from interviews with neighbors or landlords or someone other than the person living in the household that was being counted in both 2020 and 2010.

The 2020 Census, Fontenot said, is the first decennial census in which records from the IRS, Social Security and Medicare accounted for 13.9 percent of the information the Bureau collected about residents instead of receiving the information directly from them.

In addition to apportioning congressional seats, the population data calculated by the Census Bureau also determines how much of $1.5 trillion in federal money is allocated to states.