Guess the State

"_____________" Growth Threatened by Finances, Report Says

 Excerpts:

A culture of short-sightedness among the leaders of ___________ threatens the state's economic growth and its ability to provide the basic services its residents need, according to a new report on state fiscal problems by a high-profile task force. The report was issued Wednesday by the State Budget Crisis Task Force, which is led by Paul Volcker, a former Federal Reserve chairman, and Richard Ravitch, a one-time lieutenant governor of New York. It provides broad recommendations to address _________' fiscal problems, saying state government must overhaul its pension system, control Medicaid costs and reform its tax system to ensure sustainable revenue. The nation's ___________ populous state has one of the worst credit ratings in the country as it faces an estimated $83 billion pension gap and other budget holes. Elected officials have taken some steps in recent years toward change, but an overhaul of the pension system that would reduce the cost-of-living increase for retirees and shift some costs from the state to local communities collapsed earlier this year. "____________________' budget is not fiscally sustainable. Despite recent progress and difficult choices, it is still in a deep hole," Mr. Ravitch said in statement about the report.

Comment: Guess the state .... and guess what party dominates

For States and Municipalities: "Prichard is the future"

Alabama Town’s Failed Pension Is a Warning

Excerpts:

This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.

Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.

Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”

...

It is not just the pensioners who suffer when a pension fund runs dry. If a city tried to follow the law and pay its pensioners with money from its annual operating budget, it would probably have to adopt large tax increases, or make huge service cuts, to come up with the money.

Current city workers could find themselves paying into a pension plan that will not be there for their own retirements. In Prichard, some older workers have delayed retiring, since they cannot afford to give up their paychecks if no pension checks will follow.

...

“Prichard is the future,” said Michael Aguirre, the former San Diego city attorney, who has called for San Diego to declare bankruptcy and restructure its own outsize pension obligations. “We’re all on the same conveyor belt. Prichard is just a little further down the road.”

Many cities and states are struggling to keep their pension plans adequately funded, with varying success. New York City plans to put $8.3 billion into its pension fund next year, twice what it paid five years ago. Maryland is considering a proposal to raise the retirement age to 62 for all public workers with fewer than five years of service.

Illinois keeps borrowing money to invest in its pension funds, gambling that the funds’ investments will earn enough to pay back the debt with interest. New Jersey simply decided not to pay the $3.1 billion that was due its pension plan this year.

Colorado, Minnesota and South Dakota have all taken the unusual step of reducing the benefits they pay their current retirees by cutting cost-of-living increases; retirees in all three states are suing.

No state or city wants to wind up like Prichard.

Comment: I hope this is not the future for Social Security!

California: The bratty, underperforming state

California: The Lindsay Lohan of States

Excerpt:

Listen up, California. The other 48 states—your cousin New York excluded—are sick of your bratty arrogance. You're the Lindsay Lohan of states: a prima donna who once showed some talent but is now too wasted to do anything with it.

After enjoying ephemeral highs and spending binges, you suffer crashes that culminate in brief, unsuccessful stints in rehab. This cycle repeats itself every five to 10 years, as the rest of the country looks on with a mixture of horror and amusement. We'd feel sorry for you if you didn't constantly flip us the bird.

Instead, we're making bets on how long it will be before your next meltdown. Oh, wait—you're already melting down.

You've racked up nearly $70 billion in general obligation debt, and that doesn't include your $500 billion unfunded pension liability. Your own analysts predict you'll face a hole of at least $80 billion over the next four years.

Your government's run by a brothel of environmentalists, lawyers, public-sector unions and legislative bums. When they're not taxing or spending, they're creating regulations and commissions like the Board of Barbering and Cosmetology and the California Blueberry Commission. Many businesses would leave if it weren't for your sunny climate.

Which may explain why you're so obsessed with climate change. If your climate changes, no one, including your Hollywood friends, would tolerate you anymore. So you've created a law to tax carbon emissions—no matter that it will kill jobs.

It's not as if you don't recognize that you've got problems. Roughly three-quarters of you say you're headed in the wrong direction, according to a recent survey by the Public Policy Institute of California. You're even more depressed than Illinois and New York, and you've got sunshine 10 months of the year!

Comment: Will be looking for a Federal bailout!