The state of Kentucky, like many other states across the union, is facing a severe crisis in its ability to pay teacher the pensions that they were promised. Years of the state pilfering the funds that should have instead gone to funding teachers pension plans have now led to a situation where the combination of underfunding, raiding retirement funds for other projects and unrealistic actuarial expectations are now threatening to bankrupt the entire state, if radical measures are not taken soon.
Unrealistic discount rates led to rationalizations
For decades, the state’s lawmakers had convinced themselves and their constituents that everything would turn out fine, as long as stocks and bonds continued to perform at historical levels. But since the financial meltdown of 2008, it has become clear to almost everyone watching the unfolding of this multi-state crisis that the discount rates used to estimate market returns are fantastic overestimates. In fact, many analysts today deem the stock and bond markets, both, to be so overheated that any returns at all over the next ten years will be a good outcome for the nation’s public teachers’ pension funds. In the case of the state of Kentucky, this means that the total funding shortfall could amount to as much as $85 billion.
This amount is far more than the state could possibly afford without radically cutting almost all public services. The far more likely scenario will be that, should market returns on pension funds over the next decade end up on the low side, the state of Kentucky will likely end up being forced into bankruptcy proceedings. This would be extremely bad news for pensioners.
Although no state has actually declared bankruptcy, even with government bailouts from the federal level, it is still likely that pensioners would end up losing heavily. One analogue is the bankruptcy of Detroit. The state of Michigan bailed the failing city out, even as bankruptcy proceeded. But many pensioners are now receiving just cents on the dollar.
Throughout the United States, there is a silent epidemic sweeping the nation. Many of the states’ public teacher pension funds are facing serious shortfalls in their funding levels. While unions and the politicians – usually Democratic but with a significant fraction of Republicans as well – pander to the teachers and continue promising undeliverable benefits, the simple reality of the ineluctable math is beginning to manifest itself.
Kentucky as harbinger of many states’ futures
In the state of Kentucky, the problems of years of profligacy and kicking the can down the road are finally coming home to roost. The state’s public teachers pension fund is underfunded by somewhere between $33 and $85 billion dollars, amounts that represent far more than the state would ever be able to generate in surplus taxes.
The Laffer Curve alone tells us that while states like Kentucky may be able to slightly increase aggregate revenues through raising taxes, states like Illinois, which is facing, perhaps, an even more dire situation, have already maxed out their tax revenues, and anything more they try to squeeze out of their residents will just set off flight from the state.
But back in Kentucky, these are no longer academic questions. The reality of budgetary shortfalls due to necessary taxpayer contributions to the teachers’ pension plan is staring the state’s lawmakers straight in the face. Many analysts agree that the first and most likely place that spending cuts will be made is, ironically, to the state’s public school system. Although the state of Kentucky is not in imminent risk of having to declare bankruptcy, the lessons from the various municipal bankruptcies that have taken place throughout the recent history of the country indicate that failing governments tend to produce pathologically bad schools.
It would be ironic, indeed, if the teachers themselves ultimately end up cannibalizing the schools in which they teach. Since this is, more or less, exactly what took place in the Detroit Public Schools, it would be unfortunate but not surprising.
Posted on in Entrepreneur
Susan McGalla is an American businesswoman. She was born in the state of Ohio. She earned her bachelor’s degree in business and marketing from Mount Union College. Susan loves leadership and giving back to the community. She sits on the Board of Advisors at Mount Union College.
Susan has had a diverse career. She has held many positions throughout her career; however, she is most known as being the former president of American Eagle Outfitters and former chief executive officer of Wet Seal Inc. She is also a former trustee of the University of Pittsburgh. As of today, Susan is the Vice President of Business Strategy and Creative Development. In fact, she has had so much success through her career that she has been recognized as being a great leader and businesswoman.
Susan has agreed that her upbringing has impacted her confidence has a businesswoman. She was raised by her father who was a football coach. Along with her father, Susan had two brothers as well. Susan’s family did not expect less from her because she was a woman. She was expected to do everything if not more than what her brothers did. This ultimately established great judgement and work ethic for Susan.
Today in the United States there is a significant amount of gender equality in the work place. Susan has not and will not allow the stigma to stop her from succeeding. Susan has set the tone for not just businesswomen, but for all women to be fearless and strong.Susan encourages all women not to settle. It is important for women to know that they are valuable and important. Susan encourages women in executive positions to create sponsorship so that other women can have an opportunity to advance. Susan also encourages women in leadership positions to advocate for women to end the cycle of gender inequality.
Find out more about Susan Mcgalla: https://affiliatedork.com/susan-mcgalla-offers-women-executives-advancement-advice
There are some pretty sobering statistics having to do with the percentage of public school students in New York City who are homeless. In the 2016-2017 school year, it was found that 10% of students throughout New York City were homeless. This means that 1 in 10 students are homeless.
One in ten students amounts to about 111,500 students. Out of these 111,500 students, 104,000 attended district public schools while the rest attended charter schools. Within the entire state of New York, the number of homeless students numbered at 148,000, which shows that a majority of homeless students go to school in New York City. Statewide, 5% of students, or 1 in 5 students, are homeless.
There is a rising homelessness problem in New York. Housing is very expensive and sparse, and it is difficult for many people to make a living. Ever since 2010, the homeless student population has been rising. In the 2015-2016 school year, it reached 100,000. Now, it is even more than that. The current number of homeless students is the most ever recorded by New York State.
Not every homeless student lives in a shelter. Students are considered to be homeless if they live in cars or hotels or live with friends and family. This affects their school life because many times kids have to keep changing schools as their living circumstances change. Sometimes, children are placed in living arrangements where they have long commutes to school and are more likely to be late.
The Institute for Children, Poverty and Homelessness released a report this summer stating that homeless children passed English tests at half the rate of kids who lived in permanent homes. Homeless students who were learning English took a longer time learning the language than those with homes. Students are more likely to exhibit chronic absenteeism and lower grades when they are homeless. Unfortunately, these tendencies stick with some students for years after being being placed in permanent residences.
Imran Haque is thought to be a leading practitioner of internal medicine in North Carolina, having practiced the trade for an astounding 16 years, and counting. He moved to North Carolina after realizing that many people in small, rural towns didn’t get the health care they deserved. As such, he moved to North Carolina after being a resident of Virginia for three years, with the towns he served in Virginia being very similar in size and tradition to those that he lives and practices in the Tar Heel state today.
Dr. Haque was nice enough to grant an interview to a journalist at Idea Mensch, a popular blog on the world wide web. He said many things about his personal, business, and medical life that many people did not already know, even his tons of patients that have stuck with him over the years, including those that first became one of his clients in 2001, when he moved to North Carolina to practice internal medicine.
Dr. Imran Haque was asked about a failure he had as a business owner – he owns Horizon Internal Medicine, a medical practice with two branches: one in Ramseur, the other in Asheboro, both in North Carolina. Dr. Haque shared that he had opened up a textile company in rural North Carolina shortly after he moved to North Carolina and earned enough money to open it up on his own financial endowment.
The textile business was later sold by Imran Haque because he did not have enough time to dedicate to both it and his medical career. Rather than trying to make both work, as many business owners do, he decided to stick solely to internal medicine, as it was – and has always been, and will be for the rest of his working life – his true passion.
Dr. Haque feels that the best strategy one should have in being a business owner, if not to hold throughout life, in general, is, per Dr. Imran Haque himself, “The Golden Rule: Treat others as you wish for them to treat you.”
Haque will practice in the Tar Heel state for many years to come.
All across the United States, demographic changes, along with years of irresponsible fiscal policy, are combining to create a perfect storm that may herald the end of the public education system of the United States as it currently exists. Although there are many serious problems facing the U.S. public education system today, one of the most serious is the increasingly severe funding shortfalls of teachers’ pension systems and the intractable negotiations that are resulting from this dire problem.
As goes Kentucky, so goes America
One of the more dire examples of a quickly failing teachers’ pension programs is that of the state of Kentucky. So badly managed has the Kentucky Teachers Pension been that some analysts estimate the whole of the Kentucky public pension system, of which the teachers’ pension is the large majority, may be underfunded by up to $85 billion. This figure is not only staggeringly high, it is simply not mathematically possible for the government of Kentucky to meet anywhere near that level of obligations while maintaining anything like its current budget.
The downward spiral
The system is in such bad shape that some teachers are even admitting that the problems currently threaten the viability of public education in Kentucky. One of the problems brought up is that, under a bill that has just been proposed by the state’s legislature, all teachers hired after 2014 will need to immediately begin transitioning from a defined benefits program to a defined contributions, 401(k) account. But many in the teachers’ unions are sounding the alarm that this may have irrevocably deleterious effects on the ability of the state to continue attracting talented young teachers.
In Detroit, where public pension liabilities ultimately led to the city declaring bankruptcy, the local school system is in shambles. This is despite the fact that the Detroit Public School System gets massive appropriations from the state government. In Kentucky, things could ultimately turn out to be substantially worse, as the state’s schools will likely not receive significant federal funds.
The American public school system has never been in worse shape. Between declining standardized test scores, worsening graduation rates and rapidly fleeing middle-class students, who are increasingly turning to charter schools, the public education system of the United States could fairly be described as being in a state of crisis.
Now, the state of Kentucky is laying one more straw on the already strained back of the country’s public ed sector. In a recent article in the New York Times, it was revealed that the state of Kentucky’s public pension system, of which the teachers’ pension is the largest part, may be underfunded by up to $85 billion. Restated, the teachers pension system is only 15 to 30 percent funded, meaning that it is in a state of imminent crisis.
But the state of Kentucky is not alone. Teachers’ pensions systems ranging from Illinois to New Jersey are facing similarly dire circumstances. The upshot is that these state governments, if they aren’t already scrambling for an ad-hoc solution to a structural problem of their own doing, will soon be facing the kinds of choices that only a bankruptcy court may be able to resolve. And if history is any guide, municipal bankruptcies – there’s never been an entire state that has yet reached total insolvency – often lead to the near total destruction of the public school systems under their jurisdiction. We can see this in places like Detroit and Stockton, where entire school districts often don’t even meet the most basic levels of proficiency on standardized tests.
Meanwhile in Kentucky, the taxpayers will be on the hook, in 2018, for over $2 billion in direct funding that will be needed to keep that state’s teachers’ pension afloat. But this already painful measure will only be a temporary fix. The taxpayer contribution to the teachers’ pension will continue to sharply rise in the years to come, as the baby boomers retire, straining a system that was designed for many workers and only a few retirees.
While America’s public schools have steadily been getting worse over the last four decades, causing a mass exodus of middle-class families withdrawing their children from public schools and enrolling them in charters, an even larger crisis looms on the horizons of America’s public school system. Across the country, teachers’ pension systems, strained under demographic bottlenecks that were not originally foreseen when the systems were conceived and reeling from years of fiscal irresponsibility and profligate politicos pandering to their base by squandering pension principal, are facing the prospect of imminent insolvency.
This is most pronounced in states like New Jersey, Illinois and Kentucky. But dozens of other states are not far behind. The truth is that mendacious politicians, who have lavished their constituents like sailors on shore leave, in order to buy votes, combined with unrealistic projections that use completely unsustainable discount rates, have conspired to create a pension tsunami that may prove to inundate the entire American public education system under a tidal wave of unserviceable debt.
When teachers are owed, it’s the schools who pay
In the state of Kentucky alone, the total unfunded liability for the state’s public employees pension funds is estimate to be as high as $85 billion. It is, in a sense, ironic, that one of the first places where budgetary cuts are likely to occur, in order for the state to continue meeting its obligations to retired teachers, will be in the state’s public schools.
In fact, over the last 10 years in the United States, we see ample precedent suggesting that when local and state budgets become severely strained, the school systems under their jurisdiction often take the brunt of the hits. In Detroit, for example, that city’s public school system, despite massive bailouts from both the state and federal government, ranks among the worst in the entire nation. Many years the entire district has tested non-proficient at even the most basic level in math. Yes, that means that not one single student tested at even the most basic, 6th grade level for math proficiency.
In a recent Op Ed piece published by Forbes Magazine, Kerry McDonald, a woman who has become known for her advocacy of the public school system, discussed her views on public education and how it differs from public schooling. McDonald began the article by stating what she believes to be positive aspects of the American Public School system. While critics would argue that very few proven benefits exist of the public education system, McDonald believes that public institutions foster growth and development that children need to have instilled in order to become productive and lively adult citizens. McDonald’s argument is that public schools have fallen into a schooling structure rather than an educational structure.
In Mcdonald’s mind, schooling refers to the process by which students are drilled with information in practical ways. The public school advocate stated that schooling methods are dated and were better suited for the industrial society from which we have evolved. In the information age where Mcdonald stated that society values creativity and ingenuity over logic and reason, she believes that the students of public schools would better benefit from the introduction of educational practices.
McDonald discussed that public education included the development of student academic achievement using a variety of techniques and strategies. McDonald’s critique of the modern educational system is the fact that it pushes a one size fits all approach to academics and the arts. While many public school advocates argue that the lack of funding for certain programs minimizes the organizational efforts of the leadership, Kerry McDonald admits that most public schools receive an exuberant amount of funding per child compared to their private and home schooled counterparts who outperform them in virtually every subject with about a fourth of the funding. As a solution to these problems, McDonald has initiated efforts to further her involvement in the policy making decisions that can help public schools to incorporate new methods of education. McDonald’s effort to reform public education have been widely praised in the United States.
11-12-2017 Update: Don just posted a new article to his OnMogul page that’s worth checking out. All about getting a brand recognized for the first time. Something that he and Adam had to figure out for the first time once they starting building a fashion empire. Read Don Ressler’s piece here: How Do You Build Awareness For A New Brand
Mr. Adam Goldenberg, Co-Founder and Co-Chief Executive Officer of Just Fabulous, Inc. has six years of experience in product development, management, and Internet marketing. In 2006, he co-founded Intelligent Beauty, Inc. and served as its Chief Executive Officer. He also served as the President of Brentwood Cosmetics, LLC and Alena LLC since January 2004. He served as the President of Performance Marketing Group of Intermix Media LLC since January 29, 2004, and served as its Chief Operating Officer from October 26, 2001, to January 29, 2004. He co-founded Alena Media and launched Hydroderm. He then teamed up with Don Ressler to found Brand Ideas.
Mr. Don Ressler also the Co-Founder and Co-Chief Executive Officer of Intelligent Beauty, Inc. has made more than 1 billion US dollars in deals and has raised more than 100 million US dollars in capital for Internet organizations, in this manner procuring a notoriety for being a business and brand-building master. He co-founded, served as Chief Executive Officer and President of FitnessHeaven.Com, Inc. At Intemix Media, he initiated core ventures that complimented shareholder’s value. He co-founded Alena Media and created the skin care brand Hydroderm and Brand Ideas.
The two turned out to be quick friends, and when in 2005 Intermix was obtained by News Corporation. Don and Adam rushed to begin their firm. They created an e-commerce brand incubator platform called Intelligent Beauty in 2006. They then went ahead to create brands as leaders in the beauty and health market and started thinking of how to put the shopping experience online. Adam and Don worked under the rule that for fashion to work on the web, it was necessary to make it fun, interactive, and social. They prepared for a development of Intelligent Beauty and started making a personalization stage, enlisting style experts and planners, and working out an alluring and reasonable membership display. The outcome was JustFab, a style group where customers get a choice of shoes, purses, and accessories customized to their taste every month for less than forty dollars. JustFab closed an $85 million round of funding led by Passport Special Opportunity Fund in August 2014. The series conveyed the organization’s aggregate capitalization to about 250 million US dollars.