CLARIFICATION: North Dakota will be closing its main public pension plan next year. An earlier version of this story did not indicate that several sectors are exempt. (7:04 p.m. CST Feb. 7, 2024)

Starting in 2025, North Dakota will close its main public pension plan for new hires - who will instead be offered a 401k-style benefit.

National researchers say these decisions are likely to create more problems.

The Legislature last year approved switching to a "defined-contribution plan" for future public workers, amid concerns about the size of North Dakota's pension system shortfall.

The National Institute on Retirement Security is out with a new analysis of similar moves made by other states.

The organization's Executive Director - and co-author of the report - Dan Doonan said there's no guarantee of lasting improvements.

"I think a lot of people think of this as like a fresh start, like, 'Oh, what do we want to offer?'" said Doonan. "But the reality is the existing plan will be there for many decades and still have obligations to pay out current workers and retiree benefits."

The report says among the states analyzed, employer costs increased significantly after closing a pension plan.

Doonan pointed to Alaska, with higher turnover for those hired after its pension plans closed because they might feel undervalued.

That state is now debating whether to switch back. Lawmakers supporting North Dakota's move argued it was thoroughly vetted with long-term thinking. While the state is planning to close the main part of its pension plan, workers from several different sectors will not be impacted.

Meanwhile, Doonan and other skeptics said they worry North Dakota will go down the same path as other states in having to deal with unintended consequences.

He encouraged states to be creative in addressing an underfunded pension system without making a controversial switch.

"We see other places where the benefit designs are designed to share some risk with workers and retirees and that helps them keep costs stable but still offer that core benefit employees like," said Doonan, "that makes it common so that when you walk into a school, the first teacher you meet might have twenty years [of] experience."

Doonan added that states with higher employee turnover after a pension plan has closed are essentially paying to train public workers who might leave for another state.

It's unclear if North Dakota lawmakers will revisit the issue on a larger scale anytime soon. The next scheduled regular session is set for early 2025.




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As Nebraska state lawmakers convene for a special session on property tax reform called by Gov. Jim Pillen, groups are weighing in on the details Pillen has released so far.

The governor's goal is to cut property taxes by 40% to 50%, which includes the state taking over funding of K-through-12 schools. A majority of the additional revenue needed would come from higher sales taxes and/or eliminating sales-tax exemptions for around 100 goods and services.

Nebraska Farmers Union President John Hansen said the governor's plan is missing one leg of the "three-legged tax reform stool" - income taxes - which he said puts legislators in a difficult position.

"By taking income taxes off the table," he said, "the governor has already limited the Legislature's ability to come up with a solution to the property tax problem that leaves our state with a more fair and balanced tax system, that is also more widely supported by citizens."

Hansen said he fears the governor's approach will cause state sales taxes to be "out of balance" and regressive - with lower-income earners paying a larger portion of their income in sales taxes than those will higher incomes. Property tax reform has been a priority of the Nebraska Farmers Union for more than three decades.

Hansen said Pillen pushed for income tax cuts for individuals and corporations in the last legislative session, despite there being no "outcry" for income tax relief.

"If you add up the first three years of those combined income tax cuts," he said, "it more than equals the amount of additional revenue that the governor needs to fund the property tax reductions that he wants."

In addition to placing a higher burden on low-income Nebraskans, Hansen argued the governor's plan would give a huge benefit to some of the state's wealthiest residents.

"For the folks who own large amounts of property and also make large amounts of income, the governor's giving them a double tax-cut benefit," he said. "He substanstially lowers both their property taxes and their income taxes, and these are the folks who already have most of the wealth."

According to the Lincoln Journal-Star, Pillen's property tax plan would save him nearly $1 million a year in property taxes.

The Keystone State continues offering a favorable landscape for Pennsylvanians seeking employment opportunities.

Claire Kovach, senior research analyst at the Keystone Research Center, said the steady trend has been ongoing for months, with the rate hovering below the national average of 4.1% during the past year.

"Pennsylvania is on a roll," Kovach asserted. "We added, I think, 15,600 jobs in June, and that's 11 months straight now that Pennsylvania has added jobs. The data we got showed that Pennsylvania's unemployment rate is still quite low through 3.4%, and it's been at that or around that for over a year now."

Kovach pointed out inflation is falling as nominal wages are growing steadily and the persistence of the combined effects is helping the labor market recover. She noted the number of nonfarm jobs rose to a record high of more than six million.

Kovach emphasized the largest increase in jobs in June was in education and health services.

"There's just some of the jobs that are most in demand," Kovach observed. "Jobs, especially like in health services, are consistently projected to be some of the most in-demand jobs over the next years and decades, especially in Pennsylvania. I believe leisure and hospitality also reached a record high in June."

Kovach added as the economy improves and nears full employment, the jobless rate will not continue to drop forever. It is expected to gradually stabilize at a low level, with the lowest so far at 3.2%.

A coalition of South Dakota groups is voicing its opposition to a ballot measure intended to end a state sales tax on consumables.

If passed this November, Initiated Measure 28 would repeal the state's 4.2% sales tax on "anything sold for human consumption," including food and other products from toothpaste to tobacco, CBD and vaping products.

Sandra Waltman, director of public affairs for the South Dakota Education Association, said the teachers union opposes the repeal because it does not include a plan to replace the money the current tax contributes to education.

"Our main reason for opposing this is the lack of a plan for replacing the $176 million and what that will do, not only for K-12 students but for higher education," Waltman explained. "Districts would probably be looking at a very bare-bones budget."

Currently, Waltman said about 60% of public school funding comes from state coffers, and the other 40% from local property taxes. She called the potential effect on education "drastic," saying they could lead to fewer teachers, larger class sizes and cuts to newer resources like mental health support and programs for career and technical education.

Proponents of the measure said repealing the tax could help the nearly 9% of South Dakotans who are food insecure but Waltman countered the same people would likely feel the effects of underfunded school systems.

"To repeal one tax without a more broad conversation about how you replace that revenue is shortsighted, and we think you shouldn't just be repealing a tax without a plan."

Other groups opposing the measure include the South Dakota Cattlemen's Association, Chamber of Commerce and Industry, South Dakotans Against a State Income Tax and the South Dakota Farm Bureau.