A February 14 report from the Center for Economic and Policy Research finds the state and local government pension crisis to be overstated and based on faulty measures of their ability to meet their obligations.
On February 9, the House Committee on Oversight and Government Reform held a hearing on the looming debt crisis among state and local governments.
Also on February 9, the Brookings Institution posted a commentary examining the pitfalls in creating a bankruptcy code for the states, which many Republicans favor. Aside from constitutional barriers, a key problem is that liquidation is not an option, as is the case in a private bankruptcy.
On February 3, the Tax Foundation published a report on state and local sales tax rates.
On January 28, the National Academy of Social Insurance published a report on how states can set up health insurance exchanges under the Affordable Care Act, including draft legislative language.
On January 27, Reuters published an extensive report on the fiscal collapse of Nassau County, New York, resulting from unaffordable tax cuts enacted by Republicans and Tea Party members.
On January 27, the Public Policy Institute of California released a poll showing that people are very concerned about the state budget, but oppose cutting any program except prisons and corrections, which 45 percent of people erroneously believe to be the largest item in the state budget. It actually represents less than 10 percent of spending. Only 16 percent of Californians know that K-12 education spending is by far the largest category of spending, representing 42 percent of the budget.
Also on January 27, Moody’s Investors Service announced that it would henceforth take into account states’ pension liabilities in calculating their credit-worthiness.
On January 21, the Center on Budget and Policy Priorities published a report on state budget conditions. It finds that 44 states are projecting deficits this year. Although deficits are smaller than in recent years, the end of Recovery Act aid means that states will have a harder time covering shortfalls.
In a January 18 commentary, Brookings Institution fellow Mark Muro discussed the possibility of a state debt default.
The January/February issue of the Federal Reserve Bank of St. Louis Review contained an article which found that employment growth at the state level is much more correlated with state policies than national policies.
I last posted items on this topic on January 13.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Imposter: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).
