politics

States' Capital Budgets Have Become Partisan Battlegrounds

BY  | SEPTEMBER 2018

The picture spoke a thousand words: New Jersey Gov. Chris Christie and his family were frolicking and sunning themselves on an otherwise empty beach at Island Beach State Park. The sandy shore was closed to the public because a budget impasse in 2017 had shut down the government. The stalemate threatened thousands of state residents’ July 4th plans that year.

Meanwhile, on the other side of the country, legislators in Washington state were embroiled in a charged political budget battle over rural water rights. The lawmakers couldn’t agree on how to fix the problem of who had the right to dig new wells. The impasse lasted a nasty six months, but few people outside the state even heard about the freeze on spending it caused. 

That’s because while New Jersey’s budget standoff was immediately felt by all state residents, Washington’s battle merely held up the state’s capital budget. While capital budgets are incredibly important for job growth and a state’s economy, in most places holding one hostage doesn’t cause a government shutdown. Hitting the pause button on spending to build roadways and school buildings doesn’t have the same impact as closing a public beach on a hot summer day. 

 

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John Arnold: The Most Hated Man in Pensionland

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The billionaire philanthropist has vowed to secure retirement for public employees. So why do so many public employees despise him?
BY  | APRIL 2017
(Photos by Brent Humphreys)

John Arnold wasn’t a pension guy.

The billionaire financier, who made a fortune in the stock market before retiring at 38, hadn’t ever really been interested in public retirement plans. But in early 2009, just months into the global financial crisis, Arnold began seeing a flurry of news articles about public pension funds collectively losing billions in the stock market crash. Assets had plummeted, causing unfunded liabilities to shoot up. Cash-strapped governments couldn’t afford to fix the shortfall, and the longer they delayed putting more money in their pensions, the worse the problem would get. In short, it was a policy nightmare.

Arnold became intrigued. “The fact that you could go in one year from having a system that was well-funded to having a major gap -- that affected me,” he says. He started digging and found a book called Plunder: How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation, by conservative writer Steven Greenhut. As the title suggests, the book is an anti-union take on public pensions that details the misdeeds of the system’s bad actors -- public employees who game the system and wind up with pensions that are equal to or better than what their working salaries had been. Reading that book, says the now-43-year-old Arnold, “just made me mad.”

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The Evolving Job Description (and Requirements) of a CFO

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Chief financial officers used to be concerned with just balancing the books. But today’s CFOs have taken on a higher role.
BY  | FEBRUARY 2016

Kenneth Rust is a key player in redeveloping an old post office in downtown Portland, Ore. Denise Olson is pushing new technology to save Phoenix money on procurement. Jim Beard figured out how to update and expand Atlanta’s water and sewer systems while avoiding a scheduled rate hike.

These tasks require different kinds of know-how, but Rust, Olson and Beard all have the same job title: chief financial officer. It’s a position that has morphed in recent decades. Where CFOs were once primarily in charge of numbers -- making sure the books were balanced, bills paid and audits clean -- they now are called on to be strategists with an eye to developing the city’s economy. And where CFOs came to the job touting experience in a local or state finance department (and perhaps a stint as city controller as well), they now hail from more varied backgrounds. Just as in the private sector, many public enterprises are looking for CFOs with talents that include creative thinking, communication skills and long-range planning -- and for good reason. Today, just about everything a municipality does is either under the CFO’s purview or at least under his or her watchful eye. “Almost every major decision the city makes,” Beard says, “I get to be in the room.”