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Legislative News and Views - Rep. Bob Vogel (R)

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Vogel looks to alleviate state’s underfunded pension bind

Monday, January 30, 2017

 

ST. PAUL – Maybe it just makes sense that Rep. Bob Vogel, R-Elko New Market, would receive an appointment to the Legislative Commission on Pensions and Retirement for the 2017-18 biennium.

Vogel is a self-proclaimed numbers guy who is driven to increase fiscal responsibility at the state level. He is a banker by day and is well-versed in weighing assets vs. liabilities.

After reviewing the state’s underfunded pension commitments, Vogel said he is ready to put in the time and effort to make the best of what he sees as a potentially volatile situation of underfunded government liabilities.

“Uncertainty of payouts and overly optimistic assumptions about the rate of return haven’t provided the resources necessary for our state to keep up with its obligations,” Vogel said. “If you don’t properly address a problem long enough and don’t correct things soon enough, things compound and become unsustainable.

“Every year we do not accumulate enough resources for future liabilities, not only are we behind for that year, but we have to put more away the next year to make up the difference from the previous year. My experience in banking has shown me that doing that long enough can put you in an incurable spiral which may be impossible to escape.”

The commission is a joint, bipartisan panel of legislators. Vogel is one of seven House members recently appointed by Speaker Kurt Daudt, R-Crown.

“What makes this more difficult is explaining to current taxpayers these are contractual liabilities the state entities have taken on for many years and we now have to pay for them because they did not accrue the cash they should have along the way,” Vogel said. “The key now is to find solutions that allow the state to fulfill the commitments it has made without overburdening taxpayers, or pulling resources that are needed elsewhere. Our diligence and discipline now also will help to prevent our children and grandchildren from becoming responsible for debt they did not incur, and should be responsible for.

“This commission’s work wouldn’t excite most people and will take quite a bit of time, but the issues it addresses are of huge importance to our state. It’s work where a numbers guy like me can contribute and bring my focus on fiscal responsibility to the table.”

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