Best of #StateReads: Getting Aggressive With Pension Investments
This week's collection of #StateReads details how South Carolina adopted a high-risk, high-reward investment strategy for its pension funds, highlights the effects of Alabama's year-old immigration law on a Gulf Coast school and explores whether tougher laws on child abuse reporting, written after the Penn State scandal, will help victims.
“South Carolina's pension push into high-octane investments” — The New York Times
More than half of South Carolina's pension funds—totaling some $13 billion—are invested in high-risk, high-reward investments such as private equity and hedge funds, writes Julie Creswell. A Lamborghini-driving, Wall Street-schmoozing financier named Robert Borden pushed the aggressive stance before he resigned in December. Creswell says results have been mixed, but they came with costs that included Borden's salary of half a million dollars and, more importantly, fees of $344 million last year. “But the most remarkable thing about this story,” Creswell writes, “is that it could have unfolded — and, indeed, has unfolded — to greater and lesser degrees at pension funds across the nation. Hedge fund and private equity firms are selling, and taxpayers — in the form of public funds — are buying, and buying big.”
“Ala. immigration law casts pall over community's schools” — Education Week
Reporter Lesli A. Maxwell (@l_maxwell) visited Foley, Alabama, near the Gulf Coast, to see how Alabama's year-old immigration law is affecting students in an elementary school known locally as escuela amistosa, or the “friendly school.” Unlike other anti-immigration measures passed in recent years, Alabama's law requires local schools to tell the state how many of their students are in the country legally. A federal court blocked that provision, but it has had a dramatic effect in Foley — for one thing, the greater stress on students, Maxwell reports. “Educators here,” she writes, “expect the rate at which Hispanic students are held back a grade to be as much as four times what it was last year.”
“Efforts to relax pot rules gaining momentum in US” — The Associated Press
Pot smokers are on a roll in statehouses, as 17 states now authorize medical marijuana and 14 have reduced or eliminated penalties for having small amounts of the drug, reports David Klepper (@davidklepper). Rhode Island could soon become the 15th state to effectively decriminalize pot. A proposal to do so awaits the governor's signature after clearing both chambers of the legislature by large margins. The movement is gaining ground elsewhere, with voters in Colorado and Washington State set to vote in November on whether to legalize the drug. But federal opposition leaves the future of such efforts hazy.
“Sandusky child sex abuse scandal raises questions about state laws” — The Associated Press
At least 10 states started requiring more adults to report allegations of child abuse to authorities in the wake of the child rape scandal that engulfed Penn State's football program last year, writes AP's Joann Loviglio. But the widespread legislative impulse may not help the victims of those crimes, she reports. “Child advocates and academics are divided,” Loviglio writes, “about whether increasing the number of mandatory reporters will make the public more vigilant, or simply overload an already stretched-thin child welfare system and siphon limited resources from children who need help most.”
“State cashing in on more jackpots” — The Des Moines Register
Iowa is collecting 15 times as much delinquent child support money from gamblers since it changed a law two years ago, reports William Petroski (@williampetroski). Lawmakers lowered the threshold of winnings gamblers could take home without a check on whether they owed child support. Before, only high rollers who won $10,000 or more went through the check; now winners who take in $1,200 must go through the screening. So far, Petroski reports, Iowa recovered $5 million from 3,800 gamblers over nearly two years for child support. Submitted by Governing's Dylan Scott (@dylanlscott)