I soooo hoped that this is some of that fake news that our state drivebys are so fond of concocting. But it isn’t.
I don’t know how much more back-stabbing and selling-out I can stand.
From what I know of Dale Folwell personally, and from what I’ve seen of his work in the General Assembly and at Employment Security, that headline makes NO SENSE. I’d believe Folwell desiring more fiscal restraint, or less spending, before new taxes.
But, that is the headline the drivebys are presenting us with. Here are some of the highlights of the interview with Folwell.
One of the biggest and most under-reported problems in the state right now is happening at the state treasury department.
As far as pots of money go, the North Carolina Treasury is the big dog in the state by a distance. By one recent ranking, it’s the 26th largest pool of public money in the world.
And right now, that $110 billion fund is in big trouble.
“The 28th Treasurer of North Carolina is going to face financial challenges with the pension and the health care plan that the state has never seen before,” said Dale Folwell, CPA — North Carolina’s 28th State Treasurer. “It just has to do with the math.”
Folwell likes when reporters tag that “CPA” on the back of his name. He’s a certified public accountant and he says now, more than ever, that means something.
“The Folwell Administration is going to be focused on not emotion, not politics but mathematics,” he said.
Here’s the problem as Folwell broke it down. The state pension plan – currently about $90 billion – is underfunded by about $15 billion and the state health plan is unfunded (you read that right) by $32 billion.[…]
That’s about irresponsibility on the part of our, um. “leaders” on Jones Street. It’s NOT an opportunity to raid my already nearly-depleted wallet. MORE:
“I can tell you that if we don’t attack and solve these two particular issues,” Folwell said. “The things that your viewers care about, which is the core functions of state government, are going to be impacted.”
How did the state find itself with a hole that big? Here’s how Folwell explained it, at least as it relates to that $32 billion hole in the health plan.
“As health care costs ballooned and the number of people employed by the state increased as a result of the population increasing, as all of those things have happened, the state health plan is on what’s called a “pay-go” basis. When we are presented a bill from a doctor, hospital or pharmacy, we pay that bill, so we’re on a pay-go basis. The pay-go is going to require almost 3 billion dollars a year, every year, at least. Starting right now. And that’s only going to be increasing,” he said.
And Folwell said a big problem with an unfunded health plan is that it begins to implode on itself.
“Beginning teachers, beginning troopers, beginning state employees, who are protecting us from crime, educating our children, and who are involved in the state health plan; they can afford the individual coverage but they can’t afford the family premiums. So what’s happening is, we’re not attracting young, healthy people to the state health plan. And you cannot have an insurance company where you don’t have young, healthy people in it,” he explained.
“These two items, just the pension and health care, are going to require over $4 billion a year out of the General Assembly in the next 15 years. Just to fund the health care and pension liability of these two plans,” he said.
Folwell continued, saying the only way to get there is to raise taxes.
Um, NO IT IS NOT. THAT is the big-government lover’s answer. THAT is the statist, control-everybody type’s answer. THAT is the answer you expect from the folks we kicked to the curb in 2010.
How about trying a little fiscal restraint, first? Just a little? Cut off the solar and wind people. Defund half to three-quarters of the Department of Administration. “Cultural Resouces,” anyone? That’s just for starters.
He said the first thing, however, is ramping up efficiency.
“Find ways to cut out waste, fraud and abuse,” Folwell said. “Only after I’m satisfied that I’ve found all I possibly can, then will I be going to the General Assembly and the taxpayers.”
Folwell said he’ll also find the state extra money in reductions to fees paid to Wall Street money managers.
“The state pension fund last year paid over $500 million in fees to Wall Street to manage the state pension fund,” said Folwell.
Fees which he says have ballooned from $50 million to $500 million in just the past 15 years.
“We’re going to cut those Wall Street fees by at least 100 million dollars,” he offered.
A big part of the reason fees have soared is the Treasury’s move to put more money in high risk investments, or “alternative funds.” Former Treasurer Janet Cowell shifted approximately 40% of investments to these higher risk accounts but, as critics point out, never achieved higher returns on those investments than the state could have gotten in more standard funds.
Another area Folwell says he intends to depart from Cowell’s administration is transparency. Cowell faced fierce criticism over the secrecy she allowed to surround much of the money in the state pension and health plans. Folwell says that won’t happen on his guard.
How many of you would have voted for this guy if you KNEW he felt like this prior to November?