Sometimes, it’s hard to just say no. Thankfully, this isn’t one of those times.
The question at hand is whether the administration of Gov. Michelle Lujan Grisham should sign off on a whopping $85,000-a-year pay increase approved by the Educational Retirement Board for chief investment officer Bob Jacksha.
The governing board of the ERB, which oversees a $12 billion pension fund covering roughly 60,000 active educators and about 50,000 retirees, voted 4-1 last month to approve the raise for Jacksha – hiking his salary from $265,000 to $350,000 per year. This, in a state where according to Census figures the median annual household income was $48,059 in 2018 with 19.5% of the population living in poverty. This, during a pandemic where hundreds of businesses are closed, many permanently, and more than 100,000 New Mexicans are certifying for unemployment benefits.
At his new pay level, Jacksha would make more than triple the $110,000 annual salary for the governor and more than double the pay of Cabinet secretaries.
Executive Director Jan Goodwin, no stranger to grossly inappropriate salary increases, argues the ERB “simply can’t afford to lose” Jacksha, who has been chief investment officer since 2007, and points out he has outperformed the market index by $1.3 billion over a recent 10-year period.
OK, but the fund’s average returns over the past five years have fallen short of its very own 7% investment target that must be met over time in order to hit long-term solvency goals. Translation: More hat-in-hand appeals to lawmakers for taxpayer dollars to shore up the pension fund are a sure thing.
In fact, the state’s bond rating was downgraded in 2018 due largely to concerns over unfunded pension liabilities at ERB and PERA (the Public Employee Retirement Association.)
Fortunately, it takes more than the ERB board – where Deputy Public Education Secretary Adan Delgado cast the lone dissenting vote – to approve this golden payday. The Department of Finance Administration also must sign off, and that agency reports to the governor, whose administration seems appropriately skeptical.
“Certainly it’s an eye-popping number, and all the more so given the fiscal straits everyone is in at this moment as a result of the pandemic,” Lujan Grisham spokeswoman Nora Meyers Sackett said. “It would seem to be out of line with the reality everyone is dealing with financially right now.”
There’s precedent for refusing to approve an ERB raise. When the ERB board in 2018 approved big increases for executives – including 46% for Goodwin, who currently makes $183,325 – then-Gov. Susana Martinez refused to sign off on them. At the time, a spokeswoman for the DFA called the raises “highly inappropriate” and unjustified, and a teachers’ union representative deemed them “tone-deaf.”
The ERB then wisely withdrew its plans.
Lujan Grisham’s administration should add its own page in the responsible-government playbook.
While hope clearly springs eternal at the top of the ERB food chain, this kind of increase – especially when you consider the fund hasn’t met the return goals it set for itself – would be inappropriate at a time state government is under a hiring freeze, unemployment rolls have soared and hundreds of businesses have been shuttered.
So just say no.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.