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HonestChieffan
06-13-2011, 07:09 PM
Its time to fix this, reset the pensions and move on. Bloodsuckers will drain us dry.


Jun 13, 3:10 PM EDT

AP analysis: States face long slog after recession

By SHANNON McCAFFREY and ERIK SCHELZIG
Associated Press


At statehouses around the country, the Great Recession is far from over: It could take years for many states to climb out of the hole and return to pre-downturn spending levels.

An Associated Press examination of 50 balance sheets shows state budgets and bank accounts still ravaged by a drop in tax revenue. Many states are also facing enormous long-term pension and health care obligations. At the same time, the payout of stimulus money from Washington that helped many states in their darkest hours has come to an end.

While some states saw a modest jump in tax collections this spring, the combined revenue projected by the 50 states in the coming fiscal year - $734 billion - is still down by about $34 billion, or 5 percent, from the 2007-08 fiscal year, when the recession began.

Some states are in far worse shape. New Jersey, Nevada, Oregon, Illinois and Louisiana reported deficits that are more than 20 percent of the state general fund.

Even as many states begin a gradual recovery, analysts expect it will be several years before they are spending again at the levels seen before the recession.

In Georgia, for example, revenue has jumped by more than 8 percent from the previous fiscal year. But Republican Gov. Nathan Deal said he wants to use the bulk of the extra cash to replenish the state's depleted rainy day fund.

"My goal is to make sure we are on a firm financial footing," Deal said. "I think we need to be very, very cautious in our spending."

The AP collected a variety of budgetary and fiscal data from its statehouse bureaus across the country as part of a yearlong effort to examine the fiscal crises playing out across the country. The information was collected through early May and will be updated periodically throughout the year by AP's network of state government reporters, providing real-time information about state budgets and finances.

The data provides a detailed look at a moment in time when most states are struggling with deficits, spending cuts and long-term costs that threaten to restrict their spending for decades to come.

Some of the details:

- Twelve states started the year with deficits that were equal to 15 percent or more of their general fund, the budget that covers day-to-day operations.

- States with the highest per capita number of Medicaid recipients were among those with the largest budget deficits, as a percentage of general fund revenue.

- Twenty states enjoy general fund budgets that exceed their 2007 levels, while the remaining 30 states are still running behind.

- Tax revenue in Arizona, hit hard by the housing collapse, remains 19 percent below 2007 levels, the largest difference among the states. Next are California and Florida at 18 percent, and Michigan and Tennessee at 17 percent.

- The 50 states have a combined $689.5 billion in unfunded pension liabilities and $418 billion in retiree health care obligations. Five states have unfunded public employee pension liabilities of $50 billion or more.

David Wyss, chief economist at Standard & Poor's in New York, called the pension debt "the biggest headwind that the states will be fighting against" as they try to climb out of budget holes.

"It's worrying because it's such a widespread problem," he said.

States with big pension debts could be forced to pay more to borrow money.

Most state legislatures are facing a deadline to have a spending plan approved for the fiscal year that begins July 1. Spending cuts and shifting money from one account to another are the most common steps they are taking to balance their budgets.

Of particular concern to many states is the end this year of the federal government's stimulus program. The AP data show that states have accepted more than $316 billion in federal stimulus money, which has been poured into infrastructure projects, education and costly programs such as Medicaid.

In Arizona, which received a total of $6.4 billion in stimulus money, Gov. Jan Brewer and state lawmakers have approved a budget that erases a projected $1.1 billion shortfall with a nearly equal amount in spending cuts.

The biggest cut, a $500 million reduction in Medicaid, would implement a freeze to reduce enrollment by 240,000 within a year. The prospect for additional cuts looms as a temporary 1 cent sales tax increase approved by voters last year to help balance the books ends in 2013.

In some cases, states have taken steps that actually made their fiscal situation worse.

In Louisiana, for example, the drop in the state's general fund can be tied in part to hefty income tax breaks passed by lawmakers in 2007 and 2008 for middle- and upper-income earners. The permanent tax cuts drained an estimated $580 million the state would otherwise have received this year and similar amounts in future years.

Most states have resisted the temptation to raise taxes during the recession, but there are exceptions.

Then-Gov. Arnold Schwarzenegger agreed to temporary increases in California's personal income, sales and vehicle taxes in 2009. Gov. Jerry Brown, elected last fall, wants to renew those increases for up to five years to bring in more than $9 billion annually.

Since the recession began, New York's general fund has shot up $3.5 billion, or 7 percent, largely because of some of the biggest tax and spending increases in state history, including a $4 billion income tax hike on wealthier residents.

In Illinois, state revenue is 20 percent higher than in 2007 after income taxes were raised. The $6.8 billion that the increase is expected to generate will allow Illinois to avoid some cuts and spend money on neglected programs, particularly the state's underfunded pension funds.

Illinois state Rep. Frank Mautino, a Democrat, defended the tax increase as a way to help return the state to sound financial footing.

"The whole idea was to get ourselves balanced in four years because it took longer than four years to get ourselves unbalanced and in such a deep deficit," he said. "It will be very hard and very painful for a lot of people who depend on state services, but we can get to the point we need to be at."

notorious
06-13-2011, 07:15 PM
My question is this:


Who did the math and thought that these pensions were going to work?


Why should someone get paid while not working? Isn't that what retirement and investment packages are for?

HonestChieffan
06-13-2011, 07:19 PM
My question is this:


Who did the math and thought that these pensions were going to work?


Why should someone get paid while not working? Isn't that what retirement and investment packages are for?

1. Other government employees who supervise government employees. Who also get same benefits.

2. Government employee Unions.

3. The gal you talked to getting your tags renewed. The dude at the court house who gives out the septic permits.

Mr. Kotter
06-13-2011, 07:24 PM
Funny how clowns like HCF skip past key sections of the very article he posted:

"...the drop in the state's general fund can be tied in part to hefty income tax breaks passed by lawmakers in 2007 and 2008 for middle- and upper-income earners. The permanent tax cuts drained an estimated $580 million the state would otherwise have received..."

And that is the same story, in state after state....

"Tax cuts for the rich and upper classes...at the expense of everything else! Heil, Hitler!"

HonestChieffan
06-13-2011, 07:46 PM
I actually didn't "skip past" anything. Tax reform includes getting rid of tax breaks for all the leeches who are making 40 grand and paying zero.

"Louisiana for example" was left out of your dumbass point. Can we list any state with a worse track record politically than Louisiana? Lets leave Illinois aside to be fair...

alnorth
06-13-2011, 07:53 PM
Most of these states have a problem that is somewhat manageable. It may be painful, but many states are shifting away from pensions and to defined contribution plans.

Except California. That is going to be a failed state soon because despite the fact that they have the highest tax burden in the country in most categories (except property tax), they are possibly as much as a third of a trillion dollars in the red for government worker pensions. The democrats in california are completely whored out to the unions, so instead of trying to balance the budget with real concessions, they are turning on the people they supposedly care for the most: the poor. The union bosses who paid for their campaigns will fund a primary challenger for any democrat who does not slash the poor. (since tax increases are apparently not possible in CA, they dont have the votes, and the people have voted down every recent statewide tax increase)

Mr. Kotter
06-13-2011, 08:39 PM
I actually didn't "skip past" anything. Tax reform includes getting rid of tax breaks for all the leeches who are making 40 grand and paying zero.

"Louisiana for example" was left out of your dumbass point. Can we list any state with a worse track record politically than Louisiana? Lets leave Illinois aside to be fair...

Actually, dumbass-irresponsible tax cuts have been the trend...since 2000 or so, not just in Louisianna, but most of the struggling 30 states. Do your damn homework yourself, and you'll see I'm right Dumbass. Illinoise, admittedly, is in a pathetically "elite" category...along with a a handfull of states.

But it's unfair to judge the real dumbasses, from the incidental dumbasses. You of all people, should understand. Just sayin'.

HonestChieffan
06-13-2011, 08:45 PM
The nice thing about you Kotter is your consistent ability to blame everyone else and as usual accept zero responsibility for anything.

When government employees like yourself decide to fix the problems you and your peers have with the general public, you may achieve some modest amount of respect for your positions. Until then, you suffer as a result of every underperforming, mediocre government employee from the county water department to the License bureau to the local school.

CrazyPhuD
06-13-2011, 08:48 PM
Funny how clowns like HCF skip past key sections of the very article he posted:

"...the drop in the state's general fund can be tied in part to hefty income tax breaks passed by lawmakers in 2007 and 2008 for middle- and upper-income earners. The permanent tax cuts drained an estimated $580 million the state would otherwise have received..."

And that is the same story, in state after state....

"Tax cuts for the rich and upper classes...at the expense of everything else! Heil, Hitler!"

So look you can't bitch about some not highlighting a point when you miss quote a comment for your own benefit. What you elected to remove was the words.... "In Louisiana," which is actually a HUGE part of that quote. When you remove that you are making the implication that every state is in trouble because they lowered taxes. This is most definately not what the quote says. The problem is, it is also clear when you make that misquote it is not accidental. When you intentionally misquote something you will kill any credibility you might have for further parts of the discussion.

I'm sure other people do it also but that doesn't mean that you should also. Hold yourself to a higher standard than the people who misrepresent and if your point is valid, the facts will show it. Not misrepresentation and retoric. When we misrepresent this everyone loses because then no one knows what is accurate.

For instance CAs issues have nothing to do with tax cuts. Well at least not non prop 13 but that was 20+ years ago I believe. CA is likely on a road to ruin because it has issues with spending, actually the teachers pensions I believe are less of an issue here but there is rampant abuse in other pensions.

CrazyPhuD
06-13-2011, 09:27 PM
So if you want to know what CA's issues are there are a number and interesting enough many of them are the result of social policy. Probably the biggest reason for the trouble CA is in is a during good times they spend like crazy but they don't know how to cut spending during poor times. This is part of what happens when you have a legislature that is controlled by a fairly left policy. Note there have been very few if any tax cuts in CA, only spending increases. Thankfully the state requires a 2/3rds majority int the legislature to pass a tax increase. If not we would have NO spending cuts and huge tax increasing on a minority.

One of the major issues with the fluctuation in general to CA's tax base is an old piece of legislation called....Prop 13.

http://en.wikipedia.org/wiki/California_Proposition_13_(1978)

In essence your assessed value of your home can only increase by at most 2% per year. PLUS only 1% of your assessed value can be your property tax. So suppose you live in a 30 year old home it's assessed value may only be 100K where it's actual value could be well over 1million.

This tax policy was designed with good intentions. It was designed to try to prevent little old ladies from being evicted from their homes because they could not pay their property tax. Unfortunately in the law of unintended consequences, you have created a situation where people cannot move even if they wanted to because they could not afford the property taxes on their new place. SO they must stay in that house. Now that assessed value normally changes when the property changes hands. HOWEVER, there is an exception that allows parents to transfer property to their children allowing the assessed value to not change and the property tax not reset.

This prop 13 has caused the state to be based much more on income tax revenues than other states. Baring the last couple years, income taxes are generally much more variable than property values. They have kept increasing the income taxes and what they have seen over the past 5 years is that there is a large outflow of those that can leave. Simply put, people have the choice to live elsewhere and if you increase the taxes too much they just leave.

Then you have the massive pension abuses....such as people who 'retire' and collect a pension yet get hired back on at the same job for the same salary as soon as they 'retire'....

http://taxdollars.ocregister.com/2009/09/15/union-rep-blasts-so-called-double-dippers/36287/

And you have the pension spikers..... like here

http://latimesblogs.latimes.com/lanow/2011/05/ex-vernon-leader-will-continue-to-receive-500k-pension-despite-guilty-plea-to-misusing-city-funds.html

or say here......

http://www.reuters.com/article/2010/07/21/us-economy-california-pay-idUSTRE66K6BX20100721

Amnorix
06-14-2011, 07:07 AM
My question is this:


Who did the math and thought that these pensions were going to work?


Why should someone get paid while not working? Isn't that what retirement and investment packages are for?

It's a classic political move -- promise something that the poor sucker who will be in office 20 years (or whatever) from now will need to deal with. Meanwhile, I get votes now.

The 20 years (or whatever) is now up.

If I were elected God-King of America, the first thing I would do would be to make defined benefit pension plans illegal. For all corporations and governments. They are killers. Defined contribution plans are fine, but defined benefit plans must die.

Garcia Bronco
06-14-2011, 07:13 AM
It's a classic political move -- promise something that the poor sucker who will be in office 20 years (or whatever) from now will need to deal with. Meanwhile, I get votes now.

The 20 years (or whatever) is now up.

If I were elected God-King of America, the first thing I would do would be to make defined benefit pension plans illegal. For all corporations and governments. They are killers. Defined contribution plans are fine, but defined benefit plans must die.

This right here.