Public finance and pensions roundup 30 Jan 2011

INSTALANCHE! Howdy new readers – if you really want to get depressed, I’ve got a whole series on this subject.


I’ll lead off with John Bury’s post adding to his argument that NJ is the most bankrupt. His prior post on NJ being number one. I think Illinois is in a worse situation, but I do agree with Bury that any business that jumps from Illinois to NJ is jumping from the frying pan straight into the fire. I don’t care how much one likes Chris Christie.

In other news, the credit rating agency Moody’s is warning the states that it will [FINALLY DAMMIT] be factoring in unfunded pension liabilities in the states’ credit ratings.

Jeb Bush and Newt Gingrich sticking their oar in on a plan to make some sort of federal bankruptcy for states. Ace posting on that story. The states are not amused about any of this. LA Times editorial against the idea. Various quoting of pols.

The impact of state indebtedness on current services and infrastructure projects.

Three strategies for broke states – relates to government-run schooling.

Forget about education – a real low-hanging fruit of state expenditure is Medicaid.


Bloomberg decides it’s about time to get around to addressing NYC pensions. Given that he can’t run for mayor again, and may be seeking a larger political stage. Banning trans fats and promoting bike lanes only gets you so far.

An “alternative view” on public pensions. I’ll let you make your own rebuttals. For example, I’m sure the people of NJ are very happy that pension payments are contributing to communities in Florida. Small portion of the budget? Tell that to Salinas. I guess from one point of view, 14% is small. If it stayed there.

Double-dipping in New York [“retiring” and then getting rehired – so getting both salary and pension payments at same time.]


Marcia Fritz of California Foundation for Fiscal Responsibility talks about the need for pension reform in the Golden State.

The “new” governor Jerry Brown decides to give the pension issue a pass, and proposes other cuts…that doesn’t even cut half the budget gap.

San Diego town council not covering public workers for prior sweet deal made improperly. To wit: the workers have got to eat it, to the tune of about $100MM collectively. Hey, the workers who got payments over what they should have should be happy they’re not being asked to pay the excess back for benefits already received. Anyway, it will almost definitely go to court.

California pols really not happy about idea for state bankruptcy.

More from San Diego – the downside of getting new employees out of the defined benefit system. They don’t pay into the fund. Now, given that defined benefit plans for state pensions are not supposed to be Ponzi, this shouldn’t be a big deal. I don’t see why new employees really should be plugging up the holes of overly generous benefits for prior ones.


Not exactly only about Illinois, but a Washington Examiner editorial notes the sweetheart deal Quinn cut with unions right before his election…. and the proposed transparency bill by Rep. Issa in the House that could derail such a deal. [Of course, there’s no way this sucker is getting much past the House. But you’ve got to start somewhere.]

Illinois is getting a little extra scrutiny from the SEC on its recent pension accounting switcheroo. More on same. And more on same from the NYTimes. An editorial on the issue.

An editorial with one of my favorite proposals: no pensions for legislators. They already get to vote on their own salary.

Chicago proposal on pensions: increase employee contributions, make goal to reach 80% fundedness in 50 years [as opposed to 90% in 30… either way, I think there will be a cashflow problem long before the proposed horizons].

Illinois still not current on its bills.

About Meep
Meep is a member of the Irish Catholic mafia, having a suspiciously high number of green-eyed, red-haired friends. While she doesn’t have red hair herself [except when she goes into the sun (rare for any vampire)], she does have green eyes. She’s a raving Papist and is a life actuary on the side [i.e., she counts dead people]. An amateur pain-in-the-ass [willing to go pro!], she likes covering retirement, mortality, math, and education issues.

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