Free Republic

Forty U.S. states do not have enough money to pay all their bills primarily due to significant unfunded pensions or Other-Post-Employment Benefits (OPEB). Truth in Accounting (TIA), a nonpartisan, not-for-profit has been monitoring the financial health of states for a decade in order to educate taxpayers about the financial health of their states today released its tenth annual Financial State of the States.

Connecticut, home to hedge fund billionaires alongside cities mired in poverty, is racing against the clock to pass a budget or face further spending cuts to education and municipal aid across the state. Nearly two months without a budget, Connecticut is getting crushed by a burdensome debt load that has squeezed spending and amplified legislative discord. State lawmakers must agree on a biennial budget soon or else Governor Dannel Malloy’s executive order to slash state aid to municipalities and eliminate school funding for some districts will go into effect in October. The state faces a $3.5 billion deficit over the...

the public pension debt for the 50 states and the District of Columbia jumped 84 percent in recent years, from $2.625 trillion in 2008 to $4.833 trillion in 2014. ... The highest pension debt/household is in Alaska, with an estimated $113,137 figure; Illinois and California are in the second and third highest rankings at more than $77,000 per household.” The lowest state pension debt per household is in Tennessee at $17,761. Illinois has the lowest “market funded ratio” (value of pension assets divided by market liability), at 23.3 percent. The other 49 U.S. states and Washington, D.C. have a market...

As Wilbur Ross so eloquently noted, for Puerto Rico "it's the end of the beginning... and the beginning of the end," as he explained "Puerto Rico is the US version of Greece." However, as JPMorgan explains, for some states the pain is really just beginning as Municipal bond risk will only become more important over time, as assets of some severely underfunded plans are gradually depleted. But, as JPMorgan details, Muni risk is on the rise for US states, but broad generalizations do not apply (in other words, these five states are 'screwed')... The direct indebtedness of US states (excluding...

Federal bankruptcy judge Meredith Jury is expected to rule Wednesday on the city of San Bernardino's eligibility for bankruptcy protection after it ceased payments to the California Public Employees' Retirement System (Calpers) last year. The outcome of San Bernadino's case could have a huge ripple effect on cities declaring bankruptcy, most notably Detroit.

Don’t buy a house in a state where private sector workers are outnumbered by folks dependent on government. Thinking about buying a house? Or a municipal bond? Be careful where you put your capital. Don’t put it in a state at high risk of a fiscal tailspin. Eleven states make our list of danger spots for investors. They can look forward to a rising tax burden, deteriorating state finances and an exodus of employers. The list includes California, New York, Illinois and Ohio, along with some smaller states like New Mexico and Hawaii. Let’s say you are a software entrepreneur...

Illinois Democratic Gov. Pat Quinn is getting hit with a nationwide backlash over his suggestion that the federal government bail out the state employees’ pension program. Critics have in the past several days pounced on the suggestion, made last year when Quinn, in announcing the state’s fiscal 2012 budget, said part of Illinois' long-term effort to reduce the estimate $167 billion in under-funded liabilities would be to seek “a federal guarantee of the debt.” Among those leading the charge is Republican Sen. Jim DeMint. The South Carolina senator has joined the Illinois Policy Institute’s national “No Pension Bailout” campaign --...

PHOENIX (AP) -- A federal judge ruled Wednesday that Arizona authorities can enforce the most contentious section of the state's immigration law, which critics have dubbed the "show me your papers" provision. The ruling by U.S. District Judge Susan Bolton clears the way for police to carry out the 2010 law's requirement that officers, while enforcing other laws, question the immigration status of those they suspect are in the country illegally. The requirement has been at the center of a two-year legal battle that culminated in a U.S. Supreme Court decision in June upholding the requirement. Opponents then asked Bolton...

Every Arizona household's debt is getting bigger — but most people don't even know they owe. In Arizona, every man, woman and child owes state and local governments more than $7,500 for bills ranging from sports stadiums to parking garages. State and local per-person long-term debt grew from $4,568 per Arizonan in 2000 to $7,587 in 2009, an increase of 66 percent in less than a decade. Arizona's per-person debt load is almost $1,000 more than the national median of around $6,800 in per-person debt. The $7,587 owed by every Arizonan to pay off state and local debts is in...

Ten States That Cannot Pay Their Bills Posted: January 11, 2012 at 6:59 amMichael B. Sauter, Charles B. Stockdale, Ashley C. Allen 10. New Hampshire > 2011 budget shortfall as a % of general fund: 27.2% > 2011 budget shortfall: $365 million > 2012 projected budget shortfall: 18.4% (8th largest) > GDP change (2006 – 2010): +7.5% (11th smallest increase) > Median home value change (2006 – 2010): -4% (12th largest decline) New Hampshire is often considered to have weathered the recession better than most states. It has one of the strongest economies in the country in many respects. Its...

Trivia Tidbit of the Day: Part 938 -- Texas Debt Among Lowest In Nation- From the Tax Foundation: "With so much recent discussion of the fiscal outlook of the federal government, it's worth looking at the solvency of state governments as well. Today's map shows how much interest on their debt the states pay as a percentage of their direct spending. Texas also has the second lowest state debt as a percentage of personal income. While it is true that voters in Texas have approved far more bond debt, mostly for roads, in the past decade (voters, even conservative Texas...

div class="content">The map below, which shows the gravity of America's pervasive pension and healthcare liability underfunding problem, should certainly raise a few eyebrows. Sourced from the IMF's Article IV presentation which in turn sources the data from the Pew Center, the map shows that even despite the near doubling in the S&P since the March 2009 lows, there are still at least 9 states that have a minimum 35% underfunding in their pension and liability obligations. As a result, we expect that just like in the case of Illinois recently, many more states will be forced to issue debt to...

Total state government revenue dropped to $1.1 trillion in 2009, a decline of 30.8 percent from $1.6 trillion in 2008, according to the latest findings from the U.S. Census Bureau. The large decrease in total revenue was mainly caused by the substantial decrease in social insurance trust revenue. Social insurance trust revenue is made up of four categories — public employee retirement, unemployment compensation, workers compensation and other insurance trusts (i.e., Social Security, Medicare, veteran's life insurance). More details on the social insurance trust revenue will be available from the 2009 Annual Survey of State Government Employee Retirement Systems data...

The nation's menu of crises caused by governmental malpractice may soon include states coming to Congress as mendicants, seeking relief from the consequences of their choices. Congress should forestall this by passing a bill with a bland title but explosive potential. Principal author of the Public Employee Pension Transparency Act is Rep. Devin Nunes, a Republican from California, where about 80 cents of every government dollar goes for government employees' pay and benefits. His bill would define the scale of the problem of underfunded state and local government pensions and would notify states not to approach Congress like Oliver Twists,...

One of the best things to come out of the White House and Capitol Hill tax deal is that the liberals are apoplectic that there is no extension of the so called ”Build America Bonds.” These bonds are a rolling-state-government bailout mechanism that subsidizes the interest rate of state-issued bonds. Essentially, these bonds put off the day of reckoning for the blue states that are in a terminal budget flat-spin. This is a rolling bailout and you, the taxpayer, are on the hook and pay part of the interest to keep afloat states that have made terrible budgeting decisions. This...

The State of Illinois is still paying off billions in bills that it got from schools and social service providers last year. Arizona recently stopped paying for certain organ transplants for people in its Medicaid program. States are releasing prisoners early, more to cut expenses than to reward good behavior. And in Newark, the city laid off 13 percent of its police officers last week. While next year could be even worse, there are bigger, longer-term risks, financial analysts say. Their fear is that even when the economy recovers, the shortfalls will not disappear, because many state and local governments...

The State of Illinois is still paying off billions in bills that it got from schools and social service providers last year. Arizona recently stopped paying for certain organ transplants for people in its Medicaid program. States are releasing prisoners early, more to cut expenses than to reward good behavior. And in Newark, the city laid off 13 percent of its police officers last week. While next year could be even worse, there are bigger, longer-term risks, financial analysts say. Their fear is that even when the economy recovers, the shortfalls will not disappear

Federal Band-Aids won't cover the fiscal problems of such states as New York, California, Michigan and Connecticut forever. State bankruptcy and fundamental restructuring of state and local finance -- and labor relations -- is at hand. Take Connecticut. In the current fiscal year, $2 billion in federal subsidies have helped tide it over the recession -- a hefty share of its $15 billion budget. But these infusions are one-shot grants, renewed only if Congress acts affirmatively to do so. Other states depend on similar manifestations of federal largess. In Washington, the House is set to pass a $26 billion aid...

Industrial world underestimates state debt: BIS 6 Apr 2010, 2030 hrs IST,AGENCIES GENEVA: Industrialised economies face a worse public debt problem than reflected by official data because spending for ageing populations will raise debt further, research by the central bank body BIS shows. "Fiscal problems confronting industrialised economies are bigger than suggested by official debt figures that show the implications of the financial crisis and recession for fiscal balances," said the economists at the Bank for International Settlements, the bank for central banks. "As frightening as it is to consider public debt increasing to more than 100 percent of GDP...