Friday, March 29, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, January 26, 2014
Hawaii's $9,000 million Deficit, not $850 million Surplus
By Selected News Articles @ 11:34 PM :: 5517 Views :: Hawaii State Government, Hawaii Statistics

Hawaii's $9,000 million Deficit, not $850 million Surplus

by George L. Berish, Fellow of the Society of Actuaries

The Governor's $850 million Surplus is imaginary, given his $9,000 million Retirement System Deficit.

Calculating Hawaii taxpayers' unfunded liability for government worker pensions earned to date may be complex, but understanding it is not.

This graph tells  the short story since 2000:

· Top Line -- Taxpayers' Liability – about $21 billion.

· Bottom Line – Market value of earmarked assets -- about $12 billion.

· Top/Bottom Gap - about $9 billion -- Taxpayers' Unfunded Liability -- your share is about $9,000.

· Middle Line – Imaginary value of assets if the Board had earned what the Actuary "Assumed"


Longer story: As of June 30, 2000 the market value of assets earmarked to pay for pensions already earned by government workers was 103% of what taxpayers owed them. No Underfunding.

From 2000 to 2013, the Actuary recommended lawmakers "Assume" the Retirement Board would earn 8% - 7.75%, even though his 2010 Actuarial Experience Study (required by PL-88) estimated a less than a 50% chance of earing 7.75%.

And they didn't.  They averaged about 4.6% since 6/30/2000, i.e. over 3%/year short of the "Assumed" rate for 13 years.

Overestimating what the Retirement Board would earn means all decisions made by lawmakers, the taxpayers' collective bargaining representatives, bond rating agencies, and bond buyers were based on calculations that materially understated the System's cost and liabilities, by overestimating what could be earned.  It's that simple.  Given they were warned in advance, I believe that dishonest.  And it will get worse unless you believe the Board will average 7.75% for the next 30 years.

---30---

Related: Act 100: How Hanabusa and Cayetano launched Hawaii Pension crisis

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT