April 2021 – Page 6 – Actuarial News

The coming COVID-19 baby bust: Update

April 20, 2021April 20, 2021 Mary Pat Campbell

The coming COVID-19 baby bust: Update

Excerpt:

From today’s vantage point, it looks more likely that unemployment will have risen by around 5.5 percentage points in the year following the start of the pandemic (April 2020 through March 2021) from 3.5 percent to roughly nine percent. This estimate is based on observed data from the Bureau of Labor Statistics for April through November and assumes little change in the next few months. Using this revised expected change in unemployment, we would predict a 5.5 percent reduction in births from the unemployment effect alone. Applying that to the number of births in 2019 (3.75 million) suggests 206,000 fewer births in 2021.
Our original forecast also incorporated an additional reduction in births coming from the anxiety and social conditions associated with the public health crisis. We incorporated this into our forecast by examining the experience of the 1918 Spanish Flu. Back then, every spike in the death rate attributable to the flu was associated with a dramatic reduction in births nine months later. We relied on that evidence to increase our forecast based solely on labor market conditions by one to three additional percent, or another 38,000 to 114,000 fewer births.

Author(s): Melissa S. Kearney, Phillip B. Levine

Publication Date: 17 December 2020

Publication Site: Brookings

Key investor in $100 million NJ deli has a history of legal problems, ties to criminals

April 20, 2021April 20, 2021 Mary Pat Campbell

Link: https://www.cnbc.com/2021/04/19/hometown-international-nj-deli-linked-legal-problems.html

Excerpt:

A key investor in the mysterious $100 million company that owns only a tiny New Jersey deli has a history of legal woes and ties to several people who have criminal convictions or have been sanctioned by regulators.
They include a lawyer, an accounting firm and a former stockbroker who have done work related to the company, Hometown International. They are linked to shareholder Peter Coker Sr., a 78-year-old North Carolina businessman.
Coker’s Hong Kong-based son, Peter Coker Jr., is chairman of Hometown International, whose Your Hometown Deli in Paulsboro, New Jersey, had sales of only about $35,000 in the past two years combined.
Despite those meager sales, Hometown International had nearly 8 million common shares of stock outstanding. On Monday, shares of the company rose 0.15% to $13.01.

Author(s): Dan Mangan

Publication Date: 19 April 2021

Publication Site: CNBC

NJ Localities Meeting Pension Obligations

April 20, 2021April 20, 2021 Mary Pat Campbell

NJ Localities Meeting Pension Obligations

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Excerpt:

I am researching what counties been paying into the New Jersey Retirement System for their Public Employees (PERS) and Police and Fire Personnel (PFRS) since Union County has been budgeting more than they were billed but the 2021 budgets for 7 of the 21 counties are not out yet so that project is on hold.
But in going over the history of what Union County has been sending to PERS and PFRS since 2005 (which presumably would be in line with other localities) there have been some politically motivated swings but, bottom line, Union County’s ‘fair share’ is now defined as 25 times more than what it was in 2005 for PERS and 8 times more for PFRS.

Author(s): John Bury

Publication Date: 20 April 2021

Publication Site: Burypensions

GASB Public Hearing – Wednesday April 14, 2021 – AM Session

April 20, 2021April 20, 2021 Mary Pat Campbell

Testifiers:

Bill Bergman, Truth in Accounting
Chester Moyer, Ted Williamson, Matthew Marino, RubinBrown, public accounting firm
Robert Dennis, CPA

Publication Date: 14 April 2021

Publication Site: GASB channel on YouTube

GASB Webcast Recordings

April 20, 2021April 20, 2021 Mary Pat Campbell

Link: https://www.gasb.org/jsp/GASB/Page/GASBSectionPage&cid=1176163492322#vchttps://www.gasb.org/jsp/GASB/Page/GASBSectionPage&cid=1176163492322

Excerpt:

Past GASB and GASAC meeting webcasts are available below. To view or hear a recording, click on the date of the meeting. Recordings are available within 24 hours of the meeting conclusion and remain on the site 90 days following the meeting date.
Help with problems viewing or hearing webcasts, contact FAF Technical Support. Please do not use the “Submit Feedback” button on the right-hand side of the page to submit technical problems.

Archived Meeting Recordings
04/14/21		GASB Public Hearing – p.m. session
04/14/21		GASB Public Hearing – a.m. session
04/13/21		GASB Public Hearing – p.m. session
04/13/21		GASB Public Hearing – a.m. session

Date Accessed: 20 April 2021

Publication Site: GASB

Pension obligation bonds: Some Illinois city leaders want to gamble with taxpayer funds – Wirepoints

April 20, 2021April 20, 2021 Mary Pat Campbell

Pension obligation bonds: Some Illinois city leaders want to gamble with taxpayer funds – Wirepoints

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Excerpt:

Like so many local government leaders throughout Illinois, Wheaton city officials are desperate to do something about the city’s uncontrollable police and firefighter pension costs. The unfunded liabilities of the city’s public safety pension funds have jumped to $56 million over the past 15 years, and that’s despite major increases in taxpayer contributions into the funds.
Wheaton officials’ solution to the problem? Borrow more money. They’re considering a scheme using Pension Obligation Bonds, or POBs, that would let them gamble with taxpayer money in an attempt to improve pension finances. It’s simply a bad idea, especially in Illinois, where fiscal mismanagement and corruption are rampant.
Several Illinois cities have recently borrowed tens of millions via POBs, including the cities of McHenry and Freeport, and so has the Addison Fire Protection District, which took on $34 million in new debt. They’re all betting they can earn more in the financial markets than the interest costs of the loan they took out.
Official Wheaton board minutes reveal the city is also considering borrowing millions via POBs. Bankers from Baird and Marquette Associates have presented the idea, with Baird showing examples of Wheaton borrowing $56 million, equal to the city’s entire public safety pension shortfall.

Author(s): Ted Dabrowski

Publication Date: 20 April 2021

Publication Site: Wirepoints

Why should state and local taxes be deductible at all?

April 20, 2021April 20, 2021 Mary Pat Campbell

Why should state and local taxes be deductible at all?

Excerpt:

SALT does create distortions of its own, however. SALT was the largest itemized deduction, allowing itemizers to export a portion of their burdens onto Americans elsewhere through the federal tax code. And it is substantial. If I faced a 30% federal marginal tax rate, paying $100 more in SALT lowers my federal tax bill by $30. It only costs me $70. Further, because that subsidy rises, the more property is owned and the higher the income, the distortion overwhelmingly favors the richest, with the middle-class (who own less property, earn less, and face lower marginal tax rates) getting far smaller benefits and non-itemizers getting no subsidy at all.
If citizens do not get their money’s worth from SALT spending, federal deductibility allows state and local governments to export some of the burdens of their waste and inefficiency to others, increasing their incentives for such inefficiency. That is, state governments are subsidized. No wonder Democrat politicians in high budget-high tax states are so strident in their support.
In the example above, federal income tax deductibility means that so long as local citizens get more than 70 cents of value per dollar of spending, and they don’t recognize the added federal burdens they must bear from those similarly subsidized elsewhere, they think they gain.
That encourages those governments to do more of what they should not and what they do badly, not more of what their citizens want them to do.

Author(s): Gary Galles

Publication Date: 19 April 2021

Publication Site: Orange County Register

Cuomo: Congress must include SALT cap repeal in future legislation

April 20, 2021April 20, 2021 Mary Pat Campbell

Link: https://thehill.com/policy/finance/549083-cuomo-congress-must-include-salt-cap-repeal-in-future-legislation

Excerpt:

New York Gov. Andrew Cuomo (D) on Monday urged Congress to include repeal of the state and local tax (SALT) deduction cap in future legislation as House Democrats from the state are pushing to include such a repeal in an infrastructure package.
“Don’t pass another bill until you fully repeal SALT,” Cuomo said during a news conference.
Cuomo’s remarks came as he signed a state budget that raises state taxes for wealthy individuals and lowers taxes for the middle class.
The legislation Cuomo signed Monday raises the top state tax income rate to 10.9 percent for income above $25 million. It also continues phasing in tax cuts for middle-class households that were first enacted in 2016 and provides an income tax credit for certain homeowners with income up to $250,000.

Author(s): Naomi Jagoda

Publication Date: 19 April 2021

Publication Site: The Hill

Industrial Policy Is a Bad Bet

April 20, 2021April 20, 2021 Mary Pat Campbell

Link: https://www.city-journal.org/bidens-infrastructure-bill-is-a-bad-bet

Excerpt:

We can see evidence of the market distortions that government subsidies cause in the market capitalization of electric-car maker Tesla—currently about $650 billion, or more than five times that of General Electric. Tesla benefits from many subsidies already, and the Biden infrastructure plan aims to divert even more to the electric-car industry. And by increasing the corporate tax rate to pay for part of these subsidies, the Biden plan will further distort the market by making the unsubsidized private sector even less attractive to investors.
The pandemic forced many businesses to adopt new technologies that could boost productivity for decades. Productivity gains don’t always come so fast. It took more than 100 years for the steam engine, a transformative technology, to show up in productivity estimates, for example. The pandemic’s acceleration of this process of technological adoption means that we could be poised for a big burst of follow-on growth and innovation. But government interventions on the scale of the Covid stimulus and infrastructure bill threaten to divert these energies into less productive investments.
True, the added government spending will provide short-term benefits to workers in the form of new jobs building roads, bridges, and airports or retrofitting buildings with green technology. But using industrial policy to create jobs can also generate long-term risks for those workers, by steering them away from gaining the skills and experience the market may need in the future. Research has shown that workers for the Depression-era Works Progress Administration were less likely to take higher-paying private-sector jobs when they became available because they preferred the security of a government guarantee. In the long term, that can lead to wage stagnation and a population less competitive in the global market.

Author(s): Allison Schrager

Publication Date: 19 April 2021

Publication Site: City Journal

Lawyer linked to creation of $100 million New Jersey deli firm pleaded guilty in shell company scheme

April 20, 2021April 20, 2021 Mary Pat Campbell

Link: https://www.cnbc.com/2021/04/16/lawyer-hometown-international-deli-owner-stock-scams.html

Excerpt:

A now-disbarred lawyer who pleaded guilty to federal crimes related to shell company scams is listed as an attorney in early financial documents filed by a New Jersey firm whose stock valuation has risen as high as $100 million or more despite owning just a single, small delicatessen.
The former lawyer, Gregg Jaclin, was copied on communications filed by deli owner Hometown International with the Securities and Exchange Commission in 2015 and 2016, records show.
They include the very first document filed by Hometown with the SEC that is publicly available.
In June 2020, Jaclin pleaded guilty to criminal charges of conspiracy and obstruction of justice. Separately, in a related case, the SEC in 2019 entered a final judgment against him “for running a fraudulent shell factory scheme through which sham companies were taken public and sold for a profit,” a press release noted that year.
The companies involved in that conduct — none of which were Hometown International — were incorporated in Nevada with the assistance of Jaclin, who was disbarred in New Jersey last October for his actions.

Author(s): Dan Mangan

Publication Date: 16 April 2021

Publication Site: CNBC

GASB Public Hearing – 13 April 2021

April 20, 2021May 17, 2021 Mary Pat Campbell

Video:

Testifiers:

Sheila Weinberg, Founder and CEO of Truth in Accounting
Sharon Lessar, University of Denver, Daniels College of Business, School of Accountancy
Taylor Harmon, CPA in Florida, auditor, Florida Institute of Public Accountants
Craig Murray, Michigan Office of Auditor General; Eric Berman; Gerry Boaz, Tennessee Division of State Audit — representing FSMB

Publication Date: 13 April 2021

Publication Site: GASB channel on YouTube