Posted on April 20, 2016 in Fiscal Affairs
Among the myriad fiscal challenges confronting states is adequately funding their public pension plans. The most important way states carry out this function is by making the Annual Required Contribution (ARC) toward the public pension plan, an appropriation designated to cover the benefits accrued that year and to pay down a portion of any liabilities that were not funded in prior years. Since 1994, when the Governmental Accounting Standards Board (GASB) introduced the concept of the ARC, policymakers and those reviewing the performance of public pension plans have often looked to a state’s ARC to determine their commitment in bolstering the funding position of their pension plans.
In determining the ARC for a public pension plan, experts and actuaries calculate expected revenues flowing into the plan from several sources, such as investment earnings and employee contributions, and then alert policymakers about the precise ARC number based on actuarial and other calculations. The legal foundation for states continuing to make their ARCs flow from a variety of sources including statutes, ordinances, bound rules, case law and, in certain instances, state constitutions. For most states, there is an implicit or explicit legal obligation that the ARC will be paid in full. In addition, some state laws require that any increase in either benefits or employee contributions have to be approved by the appropriate authorities, in some instances the state legislative body, in that state. In the past three or so years, the credit rating agencies have started paying a great deal of attention to ARCs and the funding position of public pension plans. In fact, these rating agencies have indicated that the funding ratio of the public pension plan in question remains one of the factors considered when determining the overall credit rating of that particular state or local government.
In recent years, there has been a great deal of scrutiny of the funding position of public pension plans. This scrutiny usually involves the performance of the state and local government in regularly and reliably making their ARCs to fund their pension plans. Recent research on this topic indicates that most states have made a diligent effort to fund their pension plans through the ARC. A study by the National Association of State Retirement Administrators (NASRA), released in March 2015 of 112 state-sponsored and statewide plans between fiscal years 2001 and 2013, demonstrated that on a weighted average basis, the median ARC experience is 95.1 percent. Specifically, this study revealed that one-half of the plans received at least 95.1 percent of their ARC. In addition, the study reached the following conclusions:
In terms of the SLC states, their ARCs have been most impressive. Table 1 below provides details on the ARC experience for the region between fiscal years 2001 and 2013.
(click on headers to sort by column)
|State||Weighted ARC Average (Percent)||(Shortfall) or Surplus (In Dollar Millions)||Approximate ARC Paid in FY 2013 (In Dollar Millions) *|
|Weighted Average for SLC||94.2|
|Weighted Average for U.S.||84.3|
*Please note that the ARC contribution paid in fiscal year 2013 is an extremely approximate number and should not be construed as the final amount paid by the state. This number was tabulated from the bar graphs presented on the following pages.
As evident in Table 1, the record of the SLC states is quite notable, with six states contributing an amount either equal or greater than the ARC during the review period. The weighted average for the SLC region also is considerably higher than national average (94.2 percent versus 84.3 percent).
The bar charts below provide details on the ARC experiences in the SLC states for the fiscal year 2001 to 2013 period by highlighting the percent of the ARC received, the dollar amount paid for the ARC and the ARC in dollars. These bar charts reflect trends associated with the ARCs specified by the actuaries and the payments made by the SLC member states. Many of the states have done a laudable job of meeting their ARCs, though there are instances when in certain years, an SLC state failed to make this contribution. In fact, a review of the 12 years represented in the bar graphs indicates that there was only a single instance where an SLC state (North Carolina in fiscal year 2003) failed to make its ARC. In subsequent years, North Carolina remedied this lapse and continues to have an ARC average that is higher than both the national and SLC average.
Posted on April 20, 2016 in Health & Human Services
State legislatures continue to grapple with the myriad issues surrounding the legalization of medical marijuana as well as recreational marijuana. The following reflects a sampling of the research, articles and studies seeking to address questions related to whether marijuana and other substances are ‘gateway’ drugs. This information was compiled in response to an inquiry from a legislator in an SLC state.
A report from the National Institutes of Health’s National Institute on Drug Abuse. There are several references embedded in the report that provide scientific details on whether marijuana is a gateway drug.
A study, Probability and Predictors of the Cannabis Gateway Effect: A National Study, published in February 2015 in the International Journal of Drug Policy, maintains that the predictors of progression from cannabis to other illicit drugs remain largely unknown.
Another 2015 study in the International Journal of Drug Policy entitled, The Effect of Medical Cannabis Laws on Juvenile Cannabis Use, concludes that there is little empirical evidence to support the view that medical cannabis laws affect juveniles' use of illicit non-cannabis drugs.
An October 2015 article in the Chicago Tribune indicates that a University of Florida study found that alcohol - not marijuana - is the gateway drug that leads adolescents down the path toward more serious substances.
In a posting entitled Why Nicotine is a Gateway Drug, the NIH maintains that “Nicotine, the researchers found, makes the brain more susceptible to cocaine addiction. The finding suggests that lowering smoking rates in young people might help reduce cocaine abuse.”
A scholarly article in the New England Journal of Medicine entitled A Molecular Basis for Nicotine as a Gateway Drug. This article was co-authored by Eric R. Kandel, M.D, the 2000 Nobel Prize Winner in Medicine.
A Washington Post article on those “gateway drugs” that are legal, i.e., alcohol and tobacco. There also is a comparison of alcohol, tobacco and marijuana in the article. The study cited in this article demonstrates that of these three main substances -- alcohol, tobacco and marijuana -- children were the least likely to start using pot before the others.
According to the NIH, many factors affect drug use, such as genetic predisposition, mental health, history of trauma, and home environment. Furthermore, these factors affect other risk behaviors. In all, research on the subject is inconclusive—it is not clear whether later use of harder drugs after early onset use of marijuana is due to a biological reaction to the marijuana itself, or due to other factors common to risk behaviors. Research generally supports that early onset use of marijuana in adolescence affects the strength of predicted, later drug use.
A 2014 selective review of genetic influences in marijuana and other drug use suggests that genetic and socio-environmental factors are more likely the cause of later use of harder drugs and mental illness, rather than prior use of marijuana. While causal mechanisms are unclear, the review found several studies confirming an increased risk of the use of hard drugs following early onset use of marijuana, even when controlling for early tobacco use, early alcohol use, general issues of conduct, and depression and social anxiety. However, “as this association remained in a sample for whom cannabis was legal, the previously observed associations between cannabis and other drug use could not be explained by the legal status of cannabis.” A similar study to those reviewed supports these findings and, in reviewing the literature, finds diverse explanations for the progression from tobacco to marijuana to other illicit drugs, but that evidence for reverse gateway effects (where marijuana use precedes tobacco use) supports a common factor model.
Another analysis, by RAND Corporation, similarly regards the gateway theory as inconclusive, supporting a common-factor model, and notes: “Some might argue that as long as the gateway theory remains a possible explanation, policymakers should play it safe and retain current strictures against marijuana use and possession. That attitude might be a sound one if current marijuana policies were free of costs and harms. But prohibition policies are not cost-free, and their harms are significant: The more than 700,000 marijuana arrests per year in the United States burden individuals, families, neighborhoods, and society as a whole.”
Legalized medical marijuana has quickly spread to nearly half the U.S. states. But safety regulations lag behind, leaving medical pot users with questions about side effects.
New study finds that, with more permissive state laws, marijuana use is up – and so is addiction to the drug.
Medical marijuana push criticized by Georgia prosecutors.