Post by Darth Stateworker on Mar 2, 2012 20:36:36 GMT -5
I have done my own analysis on pension costs savings, and what those numbers really mean. I've posted more than few posts on CapCon, and will copy them here for posterity.
I have spent quite a bit of time doing this analysis this evening. It isn't hard to find current budget information, but aggregating it all and then projecting spending over 30 years requires a bit of spreadsheet work. In other words, this is information that is available not just to me, or you, but ALL of the citizens of this state and ALL of it's press corps. It's clear that no one wants to know or cares to talk about things in this perspective, because it shows Cuomos plan saves basically nothing long term while significantly cutting benefits, and sadly, the "pensions bad, 401ks good" narrative is very difficult for people to put aside, and the media WON'T do it because like most other businesses in this state, they are simply chamber of commerce sockpuppets.
CHANGE THE NARRATIVE when discussing this. SHOW how the cost savings are a farce. The math here is practically irrefutable, unlike the argument about the ECRs contained in the fiscal notes released not really showing any savings, because people can easily dismiss the fiscal notes as partisan, even if they aren't. Budget numbers are simply NOT partisan - not in this case with such a small expected rate of increase over the years.
It is important that we trust that the majority of the public can understand these numbers. Yes, extreme partisans will simply dismiss them, as they do with everything. But extreme partisans are an extreme minority of voters. Remember that.
I have recalculated the information from post #6 based on spending data from the Open Book New York site, and it appears I underestimated the city of Cohoes current spending.
Increasing at a rate of 2% per year, the city will spend $1.159 billion over the next 30 years, which then makes a savings of $17 million even more insignificant (1.1% of spending over that period) and further illustrating the absurdity of the argument that pension costs are “unsustainable” or “bankrupting”.
Look beyond politics on this folks, regardless of your political persuasion. This is a question of math, not a philosophical question, and the math is easy to do. When you do the math, even the most ardent partisan has to admit the absurdity of this, if only to themselves.
And that’s not considering the other piece of information that has been pointed out numerous times, which is that there are significant questions about Cuomos numbers in the first place, given that the actuaries for the various plans have calculated that Cuomos DC plan could very well have a higher long term contribution rate than what is currently in place.
So if doing the arithmetic over the long term using ALL of Cuomos numbers (his 2% tax cap and his pension savings figures) shows almost not significant savings when view against overall expenditures, you HAVE to admit you are being sold a bill of goods, period.
Critical thinking. It’s required to make informed decisions. Relying on an assumption that “pensions bad, 401ks good” or that pension costs will “bankrupt” this or that without actually LOOKING at the numbers just equates to being a low information voter. Don’t be that guy. Being an informed voter is a responsibility of us all, and taking a partisan position does not equate to being informed if you don’t know the facts or refuse to acknowledge them.
Increasing at a rate of 2% per year, the city will spend $1.159 billion over the next 30 years, which then makes a savings of $17 million even more insignificant (1.1% of spending over that period) and further illustrating the absurdity of the argument that pension costs are “unsustainable” or “bankrupting”.
Look beyond politics on this folks, regardless of your political persuasion. This is a question of math, not a philosophical question, and the math is easy to do. When you do the math, even the most ardent partisan has to admit the absurdity of this, if only to themselves.
And that’s not considering the other piece of information that has been pointed out numerous times, which is that there are significant questions about Cuomos numbers in the first place, given that the actuaries for the various plans have calculated that Cuomos DC plan could very well have a higher long term contribution rate than what is currently in place.
So if doing the arithmetic over the long term using ALL of Cuomos numbers (his 2% tax cap and his pension savings figures) shows almost not significant savings when view against overall expenditures, you HAVE to admit you are being sold a bill of goods, period.
Critical thinking. It’s required to make informed decisions. Relying on an assumption that “pensions bad, 401ks good” or that pension costs will “bankrupt” this or that without actually LOOKING at the numbers just equates to being a low information voter. Don’t be that guy. Being an informed voter is a responsibility of us all, and taking a partisan position does not equate to being informed if you don’t know the facts or refuse to acknowledge them.
Now, for the research on Fishkill.
Fishkill spent $7,403,126 in 2010. Making the same assumptions as Cohoes – that overall spending will increase by 2% every year, the village of Fishkill would spend about $314 million over the next 30 years.
Again, these figures represent total spending, not pension spending.
So, if the village of Fishkill stands to save about $1.4 million over 30 years, the savings is about 4/10ths of 1% of their spending.
If someone can explain how that kind of savings is significant, noteworthy, or something that the $1.4 million in that context is going to somehow cause a “bankruptcy” or is “unsustainable” using arithmetic and not partisan rhetoric, I’m all ears.
Fishkill spent $7,403,126 in 2010. Making the same assumptions as Cohoes – that overall spending will increase by 2% every year, the village of Fishkill would spend about $314 million over the next 30 years.
Again, these figures represent total spending, not pension spending.
So, if the village of Fishkill stands to save about $1.4 million over 30 years, the savings is about 4/10ths of 1% of their spending.
If someone can explain how that kind of savings is significant, noteworthy, or something that the $1.4 million in that context is going to somehow cause a “bankruptcy” or is “unsustainable” using arithmetic and not partisan rhetoric, I’m all ears.
On a statewide spending level:
Cuomo claims his changes will save localities $79 billion over the next 30 years. Again, sounds big, right?
2010 spending for all localities except the city of New York as listed on OSCs Open Book New York site was $97,074,587,531. Again, this is all spending, not simply pension spending, and does not include NYC.
Projected the exact same way – assuming spending increases an average of 2% per year, the total spending over 30 years will be $4,016,892,146,881.
That means Cuomos projected (and arguable) savings over that period of time will equate to 2.4% of spending. Again, hardly a windfall when looking at it from that perspective.
However, Cuomos site simply says “localities”, and does not state whether or not NYC is included in that savings credited to “localities”. If Cuomos $79 billion in savings figure includes NYC as a “locality”, and NYCs spending is added to the projections, again, growing at 2% per year, the savings would be 1.1%.
How is this an indication that pensions are causing “bankruptcy” or are “unsustainable”? Quite simply, it isn’t. It completely and irrefutably disproves that any of those rhetorical remarks are applicable.
Talking about large dollar amounts over an extended period of time is the ultimate shell game, especially if those large dollar amounts are not given any perspective. No one would say a word if someone said “Out of $100, this will save me $1″, because no one thinks a dollar is anything to complain about. However, say $79 billion, and people ooh and ahh – even if mathematically, that $79 billion equates to that $1 if put into perspective against spending.
Now sure, someone could argue that spending will increase less than 2% per year, so my figure are off to try to debunk what I said. However, unless they can show that historically I’d be incorrect, they are full of hot air. And for perspective, spending increases by well over 2% every year, so my estimate of it’s increase over time is actually quite conservative.
You can argue your opinion all you’d like that you think a 401k style plan would be beneficial to employees who might not to work their entire career in government. That’s opinion. Everyone is entitled to one, and there are no right or wrong answers. In fact, I’d agree with you that a 401k style option might be helpful for those that don’t want a career in government. But you CANNOT ARGUE THE MATH. It’s math. It doesn’t lie. It doesn’t have a partisan agenda. It is an inarguable fact.
Now, as I said above: if you are going to argue these points, argue the math. Save your partisanship, your biases, your cognitive dissonance, because it is all irrelevant. If you cannot argue the math by presenting math of your own, you do not have a valid argument.
This is the kind of analysis I want to see from the press. The people deserve the full story and not just the politics. Perhaps it’s a job for Fred LeBrun, because he seems to be the only one who will speak against the administration.
Cuomo claims his changes will save localities $79 billion over the next 30 years. Again, sounds big, right?
2010 spending for all localities except the city of New York as listed on OSCs Open Book New York site was $97,074,587,531. Again, this is all spending, not simply pension spending, and does not include NYC.
Projected the exact same way – assuming spending increases an average of 2% per year, the total spending over 30 years will be $4,016,892,146,881.
That means Cuomos projected (and arguable) savings over that period of time will equate to 2.4% of spending. Again, hardly a windfall when looking at it from that perspective.
However, Cuomos site simply says “localities”, and does not state whether or not NYC is included in that savings credited to “localities”. If Cuomos $79 billion in savings figure includes NYC as a “locality”, and NYCs spending is added to the projections, again, growing at 2% per year, the savings would be 1.1%.
How is this an indication that pensions are causing “bankruptcy” or are “unsustainable”? Quite simply, it isn’t. It completely and irrefutably disproves that any of those rhetorical remarks are applicable.
Talking about large dollar amounts over an extended period of time is the ultimate shell game, especially if those large dollar amounts are not given any perspective. No one would say a word if someone said “Out of $100, this will save me $1″, because no one thinks a dollar is anything to complain about. However, say $79 billion, and people ooh and ahh – even if mathematically, that $79 billion equates to that $1 if put into perspective against spending.
Now sure, someone could argue that spending will increase less than 2% per year, so my figure are off to try to debunk what I said. However, unless they can show that historically I’d be incorrect, they are full of hot air. And for perspective, spending increases by well over 2% every year, so my estimate of it’s increase over time is actually quite conservative.
You can argue your opinion all you’d like that you think a 401k style plan would be beneficial to employees who might not to work their entire career in government. That’s opinion. Everyone is entitled to one, and there are no right or wrong answers. In fact, I’d agree with you that a 401k style option might be helpful for those that don’t want a career in government. But you CANNOT ARGUE THE MATH. It’s math. It doesn’t lie. It doesn’t have a partisan agenda. It is an inarguable fact.
Now, as I said above: if you are going to argue these points, argue the math. Save your partisanship, your biases, your cognitive dissonance, because it is all irrelevant. If you cannot argue the math by presenting math of your own, you do not have a valid argument.
This is the kind of analysis I want to see from the press. The people deserve the full story and not just the politics. Perhaps it’s a job for Fred LeBrun, because he seems to be the only one who will speak against the administration.
I have spent quite a bit of time doing this analysis this evening. It isn't hard to find current budget information, but aggregating it all and then projecting spending over 30 years requires a bit of spreadsheet work. In other words, this is information that is available not just to me, or you, but ALL of the citizens of this state and ALL of it's press corps. It's clear that no one wants to know or cares to talk about things in this perspective, because it shows Cuomos plan saves basically nothing long term while significantly cutting benefits, and sadly, the "pensions bad, 401ks good" narrative is very difficult for people to put aside, and the media WON'T do it because like most other businesses in this state, they are simply chamber of commerce sockpuppets.
CHANGE THE NARRATIVE when discussing this. SHOW how the cost savings are a farce. The math here is practically irrefutable, unlike the argument about the ECRs contained in the fiscal notes released not really showing any savings, because people can easily dismiss the fiscal notes as partisan, even if they aren't. Budget numbers are simply NOT partisan - not in this case with such a small expected rate of increase over the years.
It is important that we trust that the majority of the public can understand these numbers. Yes, extreme partisans will simply dismiss them, as they do with everything. But extreme partisans are an extreme minority of voters. Remember that.
