Pension Obligation Bonds and Government Spending
Public Budgeting and Finance, 33(4):43-65
Thad Calabrese and Todd Ely
We examine the use of pension obligation bonds (POBs) as a financing strategy to
address the effects of unfunded pension liabilities on government operating budgets. POBs are publicly marketed as money-saving mechanisms that reduce pension system payments while allowing for increased spending on other government priorities. We review general POB usage and examine whether POBs altered school district spending patterns in Oregon and Indiana. Our results indicate that districts issuing POBs have not increased educational spending relative to other districts. Because POBs cost money to issue and manage, decision makers are encouraged to consider annual budgetary effects prior to issuance.
Measuring the Equity of School Finance Policies: A Conceptual and Empirical Analysis
Policy Analysis, 7 (1):47-70. Reprinted in Ray C. Rist, ed., Policy Studies Review Annual, Volume 6, Sage, Beverly Hills, CA., 1982: 620-642.
Berne, Robert and Leanna Stiefel
Measuring Equity at the School Level: The Finance Perspective
Educational Evaluation and Policy Analysis, 16 (4): 405-421.
Berne, Robert and Leanna Stiefel
This article explores conceptual, methodological, and empirical issues in resource allocation at the intradistrict and school levels. With increased attention focused on policies and data related to resources within districts, it is important that analytical problems and potential solutions be debated by researchers. The article develops ways that equity concepts can apply at the school level, identifies a series of methodological issues, and includes an empirical analysis of vertical equity at the intradistrict and school levels in New York City.
Facing Constraints, Seizing New Opportunities: A Strategic Management Review of the United Nations Population Fund Program in Indonesia, 2006-2010
Crafting performance measurement systems to reduce corruption vulnerabilities in complex, multistakeholder organizations: The Case of the World Bank
Measuring Business Excellence 11(4): 23-32.
Purpose – The paper explores an emerging challenge for large public-sector bureaucracies: developing information and performance measurement systems that support anti-corruption efforts.
Design – An analytical framework linking functions and contexts of performance measurement to anti-corruption requirements is presented. The framework is used to explore a case study of the World Bank’s ongoing efforts to strengthen anti-corruption information systems in Indonesia.
Findings – A range of organizations are increasingly turning to performance measurement systems to fulfill several functions related to organizational integrity: to hold organization’s accountable for reaching publicly stated standards of fiduciary responsibility and corruption control; to identify vulnerable operational points in multi-faceted public enterprises; and to facilitate organizational learning regarding ‘what works’. Yet corruption is difficult to measure, and corruption vulnerabilities often arise from informal practices, insufficient incentives for enforcement or adherence to standards, and managerial blindspots. Enhanced information systems need to be coupled with effective and multi-directional accountability arrangements in order for performance measurement to contribute effectively to corruption control.
Practical implications – Improved information systems and a reassessment of managerial incentives and attitudes are both essential in order to reduce organizational vulnerability to corruption and to the public backlash that follows in the wake of corruption scandals.
Originality/value – Focus on an emerging area of performance management likely to gain increasing visibility as large bureaucracies attempt to institutionalize public commitments to high anti-corruption standards
Creating Deficits with Balanced Budgets
Journal of Government Financial Management 60(4): 38-44
Ives, M., Calabrese, T.
Alternative Service Delivery: Does Nonprofit Financing Influence State Tax Burden?
Examining the Determinants of Nonprofit Accounting Basis Choice
Association for Budgeting and Financial Management
Why Do Nonprofits Retain Unrestricted Net Assets? Evidence from Panel Data, and Policy Implications
Association for Research on Nonprofit and Voluntary Action
School District Pension Bond Issuance and the Influence on Spending Behavior
Association for Education Finance and Policy
Calabrese, T., Ely, T. L.
Money for Nothing? Pension Obligation Bonds and Government Spending
Public Finance and Budgeting Section, Western Social Sciences Association
Calabrese, Thad., Ely, T. L.
Pension Obligation Bonds: Financial Crisis Exposes Risks (Brief Number 9 in State and Local Pension Plans Series ed.)
Center for Retirement Research at Boston College
Munnell, A., Calabrese, T., Monk, A., Aubry, J.-P
The brief’s key findings are:
- Some state and local governments issue Pension Obligation Bonds (POBs) to raise cash to cover their required pension contributions.
- POBs allow governments to avoid increasing taxes in bad times and could reduce pension costs, but they pose considerable risks.
- Those who issue POBs are often fiscally stressed and not well-positioned to handle the investment risk.
Testing Competing Capital Structure Theories of Nonprofit Organizations
Public Budgeting and Finance 31(3): 119-143
The static trade-off and pecking order capital structure theories are analyzed and applied to nonprofit organizations. In addition, this paper also considers how nonprofits adjust their leverage over time. The analyses consider the unique role of donor-restricted endowments in the decision to borrow, as well as different types of borrowing by nonprofits. The results indicate that nonprofit capital structure choices are best explained using the pecking order theory, in which internal funds are preferred over external borrowing. Further, nonprofit endowment is not found to increase leverage. Despite the unambiguous findings across varying definitions of leverage, the results also suggest that a “modified pecking order” is a more apt descriptor of nonprofit behavior.
Efficient Funding: Auditing in the Nonprofit Sector
Manufacturing & Service Operations Management. 13(4) 471-488.
N. Privett and F. Erhun
Nonprofit organizations are a critical part of society as well as a growing sector of the economy. For funders there is an increasing and pressing need to ensure that society reaps the most social benefit for their money while also developing the nonprofit sector as a whole. By routinely scrutinizing nonprofit reports in an effort to deduce whether a nonprofit organization is efficient, funders may believe that they are, in fact, giving responsibly. However, we find that these nonprofit reports are unreliable, supporting a myriad of empirical research and revealing that report-based funding methods do not facilitate efficient allocation of funds. In response, we develop audit contracts that put funders in a position to enact change. Auditing, perhaps obviously, supports funders; however, we find that it also benefits the population of nonprofits. Moreover, auditing results in improved efficiency for the nonprofit sector overall. Indeed, our conclusions indicate that nonprofits may want to work with funders to increase the use of auditing, consequently increasing efficiency for the sector overall and impacting society as a whole.
One Thing I Know: Falling Upward
Contexts, 10(3): 84
The 2013 Federal Budget's Impact on Communities of Color and Low-Income Families
Women of Color Policy Network
The Obama administration's budget proposal for fiscal year 2013 (FY 2013) strengthens the national economy by investing in schools, communities and safety net programs. The FY 2013 budget also includes a number of important investments in infrastructure that will spur much needed job growth in a time of economic uncertainty for many working and low-income families. It is critical that such investments take into account the persistently high unemployment in communities of color, and target spending to increase the economic security of the communities most impacted by the "Great Recession." Additionally, the budget includes important changes to the tax code that will lay the foundation for a fairer and more equitable economy.
A Canary in the Mortgage Market? Why the recent FHA and GSE loan limit reductions deserve attention
Furman Center White Paper
Madar, J. & Willis, M.A.
On October 1, 2011, the maximum loan size eligible for Federal Housing Administration (FHA) insurance or a guarantee from Fannie Mae or Freddie Mac (known as "Government-Sponsored Enterprises" or "GSEs") dropped in dozens of metropolitan areas around the country. When this change took effect, a segment of the mortgage market in each of these areas instantly lost some or all federal backing. If enough borrowers seeking loans in this segment are unable to find financing, the result will be further downward pressure on the corresponding segment of the housing market. In this report, we use recent mortgage origination data to explore some of the possible implications of this policy change for the housing market and the U.S. mortgage finance system.
Analysis of FY 2012 Budget and Deficit Reduction Plans
Women of Color Policy Network. "Analysis of FY 2012 Budget and Deficit Reduction Plans." April 2011
Women of Color Policy Network
This month, Chairman of the House Budget Committee Representative Paul Ryan, the Congressional Progressive Caucus (CPC) and President Obama shared three very different FY 2012 budget proposals and deficit reduction strategies. The CPC's People's Budget calls for investments in job creation and deficit elimination by increasing tax revenues from the wealthy. President Obama's deficit reduction plan combines spending cuts, tax reform and enhancing the Affordable Care Act to reduce growth in health care spending. Representative Ryan's proposal extends tax cuts to wealthy individuals and corporations, while cutting social safety net programs such as food stamps, housing assistance, and Pell Grants. This policy brief evaluates each proposal's impact on people of color and recommends investing in job creation and infrastructure to strengthen communities in times of hardship and prosperity.
2011 Federal Policy Review
Published by the Women of Color Policy Network, August 2011.
Women of Color Policy Network
This summary of legislative action pertinent to the Network's federal policy priorities assesses how noteworthy acts and trends in Congress affect the lives of women of color, their families, and communities. Covering the areas of economic security, social equity, and immigration, the brief provides updates on the status of reproductive rights, job creation, safety net programs, and the DREAM Act, among other topics. The Network's assessment of the policy implications indicates that although the federal legislative landscape offers some progressive opportunities for women of color, obstacles to their advancement loom large amongst ongoing budget and deficit reduction negotiations.
Assessing the cost of transfer inconvenience in public transport systems: A case study of the London Underground
Transportation Research Part A: Policy and Practice, Vol. 45, 2, 91-104
Guo, Zhan and Nigel H.M. Wilson
Few studies have adequately assessed the cost of transfers in public transport systems, or provided useful guidance on transfer improvements, such as where to invest (which facility), how to invest (which aspect), and how much to invest (quantitative justification of the investment). This paper proposes a new method based on path choice,3 taking into account both the operator's service supply and the customers' subjective perceptions to assess transfer cost and to identify ways to reduce it. This method evaluates different transfer components (e.g., transfer walking, waiting, and penalty) with distinct policy solutions and differentiates between transfer stations and movements.
The method is applied to one of the largest and most complex public transport systems in the world, the London Underground (LUL), with a focus on 17 major transfer stations and 303 transfer movements. This study confirms that transfers pose a significant cost to LUL, and that cost is distributed unevenly across stations and across platforms at a station.
Transfer stations are perceived very differently by passengers in terms of their overall cost and composition. The case study suggests that a better understanding of transfer behavior and improvements to the transfer experience could significantly benefit public transport systems.