SD government handing out bigger bonuses in tuff times
Big government anti-capitalist liberals rightly like to point out the injustice when CEOs of big business receive huge bonuses even when their companies are losing money. Lets see some intellectual honesty when the same thing happens in government:
Just before state Investment Officer Matt Clark told South Dakota law-makers the bad news about state investment losses during the global financial slump, he had to explain why he is entitled to a larger annual bonus than was previously approved.
Clark and other staff members who work at the state Investment Office get bonuses if they perform better than similar investment operations around the nation. The bonus is based partly on a four-year period.
In August, the Legislature’s Executive Board approved a $147,178 bonus for Clark.
But that calculation was based on a national report that contained inaccurate information about another state’s investment performance, Clark said. After the accounting mistake was corrected, South Dakota ranked higher than earlier reported, which meant Clark is entitled to a larger bonus.
On Monday, the Executive Board approved an extra bonus of $25,063.
Curt Johnson, state Investment Council chairman, said the bonus formula is based on a four-year period to encourage office managers to get good results in the long term without taking excessive risks in the short term.
The Investment Office earned good returns for three years before losing money last year, Johnson said. "We had three super home-run years and then a bad year."
And the governor has been saying the upcoming budget is going to be tight and legislators are planning more taxes and fees to pay for maintaining our roads. Too bad we don’t have a more transparent look into the financials so that the taxpayers can help the legislators set spending priorities. But that is the environment of a state whose government is last in integrity.
The South Dakota Retirement Fund has lost $1.8 billion since July 1 and several state trust funds have also taken heavy losses because of the stock market plunge, officials told a legislative committee Monday.
The losses will cause the Retirement System’s Board of Trustees to discuss possible adjustments in benefits for retirees, and state trust funds likely won’t be able to contribute money that has gone to schools and health care programs in recent years.
The Retirement System has lost an estimated 27 percent since the beginning of the budget year on July 1, mostly because of declines in the stock market, state Investment Officer Matt Clark said. The system held $7.4 million at the beginning of July.
I think the first paragraph should have said $1.2 "million" or the last paragraph should have said $7.4 "billion". This may help provide the answer:
Rob Wylie, executive director of the South Dakota Retirement System, said the system operates on a long-term strategy and still has assets of about $6 billion. Benefits were improved last year, but the Board of Trustees next month will discuss whether those improvements need to be trimmed in light of the global economic slump, he said.
"We’ll do everything we can to keep the benefits whole and positive for the plan," Wylie said.
This year’s loss is partly offset by large earnings in some prior years, including a 21 percent gain two years ago.
Four trust funds that contribute money in normal years to help finance the state budget have lost roughly 18 percent so far during the budget year, Clark said. Because the market value has fallen below the beginning principal for some trust funds, money that has gone to education and health care programs in recent years likely will not be available for the next budget year, he said.
Clark said the Education Enhancement Trust Fund, the Health Care Trust Fund and the Dakota Cement Trust Fund have lost enough money that their values have fallen below the beginning principal.
The trust fund set up with proceeds from the sale of the state Cement Plant still will provide $12 million to help finance the state budget next year, but other distributions from the trust funds will not be made unless the House and Senate vote by a three-quarters majority to invade the principal in the education and health care funds, Clark said.
Most importantly, that could mean that about $15 million that has gone to schools from the education trust fund in recent years will not be available. Another $4 million will not be available for health care programs.
So, should the taxpayers have to "pony up" or should state government cut less important programs?
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