Recent news events have had me thinking a lot about broken promises.
No, I’m not talking about that domestic dust-up over that birthday card for my wife. (I’d hidden it so well even I can’t find it.)
And I’m (almost) over my displeasure that the sunset taxes never set.
What started me down this road was a report that corporate pension funds fell further behind in funding their responsibilities in 2014, a year in which the stock market managed a double-digit percentage gain.
What’s wrong with this picture? Has the specter of second-guessing from regulators and activist investors made fund managers reluctant to manage risks and volatility? That could be a factor but the real cause here is Congress, which let businesses cut back on pension funding levels. Short term, it’s a windfall for business but longer term? It’s sending a wide swath of company pension plans into worse trouble than they saw at the bottom of the Great Recession. It’s not yet as bad as the public pension mess, but that’s a low bar.
Public pensions have been in a world of hurt for some time. The reasons are well documented, starting with a system rigged to favor unions and weak-willed politicians who know they won’t be in office when the bill comes due.
But there just aren’t a lot of good excuses for private pension funds to slip into the danger zone. The examples of failed corporate pension plans are horrific. There is a government safety net that is of some help. But it’s hard to watch images of couples, who had been expecting to clip bond coupons, instead clipping grocery coupons.
As bad as that is, the one that sent me over the edge was the Public Utilities Commission deciding Switch can’t exit NV Energy’s power system. Sure, this one is going to go through a lot of dips and turns — plus likely litigation — before anything is final. And there is certainly a case that the impending exit of a string of major users would work against the public interest.
But the law says they can go. It was a law passed in a different energy environment, one in which the state wanted to encourage companies to be self-sufficient. That situation has changed. Yet, if the state didn’t want companies to rely on its laws, the Legislature — which just ducked on solar energy — could have repealed the exit law. It didn’t, so that law is in play for at least another two years. Deal with it.
The only legitimate question is the exit fee. Certainly the PUC can do the math and figure out a fee that would be an effective deterrent to anybody leaving. That, too, would be a broken promise. And it would send a much more cynical message to private citizens and businesses alike.
So here we sit, fresh from a “Profiles in Courage” moment when Republicans led the fight to pass the state’s largest tax hike in history, all to make good on the promise of education to the next generation. It was done — at least partly — in the name of improving the state’s competitive position in attracting new business.
Yet within days, we’re spiraling into a new mess that undercuts the ability to trust what the government says.
Conservative agitator Chuck Muth is leading his own fight over what he sees as a different governmental broken promise, i.e. not to raise taxes. And he’s off to seek redress via a ballot measure to reverse the tax hikes.
There’s a certain order to that remedy. But where are Switch and the major casinos to go? The law is already on their side. Their only route is to the courts, one of the worst places to settle a matter of public policy.
As a society, individuals and businesses need to be able to plan and make decisions based on a stable fact set. That’s just not happening in America today — from federal spying to red/blue policy flip-flopping. And it’s not happening in Nevada, where red and blue have merged into a confusing purple that is creating a mess in its energy policy.
Now, excuse me while I go back to hunting for that birthday card. I’ve only got 51 weeks left to keep that promise.