Lepage promises to honor promises to state employees pension funds and suggests changing the system for future employees. Lepage says he will have to talk to the legislature, but does not explain why- which is because contractual terms of agreement have been embedded into the Maine State constitution since 1997. For a candidate who is running on a platform that includes respecting the constitution, I find this failure to mention the constitutional mandate which clearly impacts the unfunded liability problem disappointing.
Both Kevin Scott and Moody articulate the solution better than LePage, who suggest the same ideas, but not as forcefully. All agree that the problem must be "isolated" to quote Kevin Scott, meaning that future employees must be hired on a different set of terms. Moody addresses the issue of risky investment choices made by the managers of the MPERS fund more forcefully than the others and he brings up a crucial point that others failed to mention - The contractual agreement with the Maine Public Employees System, which is embedded into the Maine State constitution makes all business investments in Maine very risky. There is an element of uncertainty, affecting potential business investments, as to how the constitutional mandate may be enforced in the future- and so it is arguable that both the creation of the MPERS investment fund, through special act of legislation, and the constitutionalizing of that fund's contractual agreement have created the need for further government chartered investment corporations- all of which use tax payer dollars to give government chartered investment companies the edge over the private sector.
Like MPERS, the Small Enterprise Growth Fund was chartered by a special act of legislation with these words; "this is an essential government function" Is it? This is the question that LeBlanc should have asked but instead the problem of the unfunded liabilities created by the MPERS investment fund was discussed as though there were no relationship to The Maine State constitution (Article IX General Provisions, Sectio 18-18-B). How can we return to the premise of our constitution when we ignore the Maine State constitution in our collective dialogue? As new media, LeBlanc can lead the way in recognizing the big gorilla in the works.
Early in 2010, the legislature added another government chartered investment corporation to it's portfolio with yet another the special act of legislation chartering yet another capital investment company. LD1, bears the title "An Act To Stimulate Capital Investment for Innovative Businesses in Maine" although the legislation prohibits investing in individual businesses and mandates investing in mutual funds. LD1 requires that the mutual funds give "strong consideration" to investing in this state.....and "Will maintain at least a periodic presence in the State".
LD1 or "The Fund of Funds" cites The MPERS investment fund as it's preferred "lender" (meaning investor). I has been sold as a benevolent act by the Maine legislature to relieve the Maine people of their unfunded liability to MPERS. However MPERS does not mention LD1 in it's recent news letter. Perhaps because, with the taxpayers signed up as the risk bail out fund for "The Fund of Funds", the investment strategy of that fund is too risky, even for MPERS, which also relies on the Maine state taxpayer as a bail out fund. neither government chartered investment company provides the Maine state taxpayer a profit share. The justification for using the Maine taxpayer as a bail out fund appears to be simply that our government is "creating jobs",- in the chosen sectors that serve the government's design to transform Maine into a better place- at least according to our government's approved network
The favored economic sectors are mandated in the newly chartered mutual funds investment corporation.
49-J. Targeted technologies. "Targeted technologies" means biotechnology, aquaculture and marine technology, composite materials technology, environmental technology, advanced technologies for forestry and agriculture, information technology and precision manufacturing technology.
Once again the legislature clearly identifies the special interests which will be the beneficiaries of the special act of legislation chartering "The Fund of Funds".
Article IV Part Third , Section 14 is quoted at the top of this blog.
According to The Maine State Constitution- A Reference Guide by Marshall J. Tinkle “Special or private laws relate to particular persons or things or operate on a selected class rather than on the public generally”
MPERS is a special class of persons - NOT the public generally.The targeted technologies which are being advanced by Maine's network of government managed economy is a special class of things.
LD1 also identifies the government network as those that are favored by this legislation when it includes the following in "Investment goals and guidelines"
B. Will build linkages to, and accept referrals from, at least some of the organizations promoting the State's innovation economy, including the authority, the Maine Technology Institute under Title 5, section 15302, the Small Enterprise Growth Fund under section 383, the Department of Economic and Community Development, the Maine Patent Program under section 1921, the University of Maine System and other venture capital investors within the State;
The guidelines also include:
E. Demonstrates the ability to make successful venture capital investments.
So what happens if the investment fund instead demonstrates it's ability to successfully lose large sums of capital?
That is why they included the taxpayer as bail out fund in the special act of legislation chartering a mutual funds investment corporation to benefit special classes of people, and special industries and to work with a special network of agencies.