Everyone talks about the Federal deficit, but the states are in serious trouble as well.
US States Facing Debt of $4 Trillion
The total of U.S. state debt, including pension liabilities, could surpass $4 trillion, with California owing the most and Vermont owing the least, a new analysis says.
The nonprofit State Budget Solutions combined states' major debt and future liabilities, primarily for pensions and employee healthcare, unemployment insurance loans, outstanding bonds and projected fiscal 2011 budget gaps. It found that in total, states are in debt for $4.2 trillion.
The group, which follows state fiscal conditions and advocates for limited spending and taxes, said the deficit calculations that states make "do not offer a full picture of the states' liabilities and can rely on budget gimmicks and accounting games to hide the extent of the deficit."
The housing bust, financial crisis and economic recession caused states' tax revenue to plunge, and huge holes have emerged in their budgets over the last few years. Because all states except Vermont must end their fiscal years with balanced budgets, states have scrambled to cut spending, hike taxes, borrow and turn to the federal government for help.
Taxpayers are worried the states' poor fiscal health will persist for a long time and some Republicans in Congress have questioned whether the situation is worse than the states say.
State Budget Solutions relied on financial reports and income tax rates provided by the Federation of Tax Administrators in determining its rankings.
The true debt totals may be lower, though, because the group also used the highest estimates of pension gaps. The conservative think tank American Enterprise Institute says public pensions are short $2.8 trillion.
Others, including the nonpartisan research group Pew Center on the States, put total unfunded pension liabilities at around $700 billion.
The wide range is based on different assumptions of the returns of pension fund investments, which provide the bulk of money for benefit payments. Conservative economists say the investments will have annual returns of around 4 percent, while many funds expect returns in line with the average of the last 20 years — closer to 8 percent.
Using the higher pension gap number, State Budget Solutions said California is in the biggest financial hole — with total debt of more than $612 billion. New York follows with $305 billion of debt, and then Texas, with total debt of $283 billion. Vermont has the lowest amount of total debt at just over $6 billion.
The group also looked at the financial shape of states using the Pew pension projections. It came up with a total debt of $2 trillion for all states.
California still owes the most under the alternative computation, but the state's total debt drops significantly, to $307 billion. With the Pew numbers, New Jersey follows with $183 billion of debt and Illinois is next at $150 billion.
According to the analysis, California has also borrowed the most from the federal government to pay for unemployment benefits, $8.6 billion. Michigan was next, taking out $3.1 billion, and then New York, borrowing $2.9 billion.
As unemployment shot up, some states could not pay for the surge in demand for jobless benefits. The federal government loosened its lending rules to keep states from having to cut other areas of their budgets. But last month the U.S. government again began charging interest on the outstanding loans and may levy extra taxes on businesses in states with outstanding loans.
Looking at just state annual financial statements, the group found Connecticut has the highest debt per capita, at $5,402, and nine states have debt of more than $3,000 per capita.
*******************************************************************************
Who needs enemies with friends like this? I mean the guy had to lube himself to get into the swing. I can't believe he would surprised he got stuck.
Friends Leave Man Stuck in Swing
A Vallejo man was found in a child's swing Saturday morning after reportedly being stuck for about nine hours, police said.
At about 6 a.m., a groundskeeper of Blue Rock Springs Park heard a man screaming when he arrived at work. He then called the police to investigate.
Upon arrival, police found a 21-year-old man stuck in a child's swing, which has two leg holes.
The man told police that he had been stuck in the swing since 9 p.m. Friday after he allegedly made a $100 bet with his friends. He proceeded to lube himself with laundry detergent to get into the swing, police said.
The friends then reportedly left him swinging through the night.
Vallejo firefighters then were called to rescue him by cutting the swing chains off. He was then transported to Kaiser Permanente Vallejo Medical Center, where firefighters used a cast cutter to cut the swing off his body, firefighters said.
He sustained non-life threatening injuries.
******************************************************************************
Mexican IDs Now Accepted in Sonoma County
In Sonoma County, a California driver's license is accepted as valid identification -- but so is a card issued by the Mexican consulate.
Mexican nationals will be able to give their country's state-issued identification cards as valid ID to Santa Rosa police officers and Sonoma County sheriffs, the Santa Rosa Press Democrat reported.
The idea is to reduce the immigration-related duties of local cops, the newspaper reported. Accepting Mexican consulate-issued cards will reduce the number of people booked into jail for lacking ID, and ergo, will reduce deportations from Santa Rosa County Jail, the newspaper reported.
"Today is a great day," Sonoma County Assistant Sheriff Lorenzo Dueñas said. "We're now going to accept the matriculár consular ID."
advertisement
Advocates for immigrants point out that almost half of the 921 immigrants turned over to ICE authorities by the jails had not committed a crime, and another third had committed minor offenses, the newspaper reported.
Multimedia
Mexican nationals will need to apply to the consulate for such a card. The consulate will likely set up shop in the area to both issue cards and instruct people how to do so, the newspaper reported.
*******************************************************************************
These weather related disasters really seem to be picking up in frequency. One third of Thailand is currently under water.
City officials ordered the evacuation of six northern districts as the floodwaters approached.
But, with Ms Yingluck having consistently taken a more optimistic tone than the governor of Bangkok, who represents the opposition Democrat party, residents said they were preparing for the worst and have been stocking up on food and water. Some supermarkets have run out of supplies.
At least 350 people have been killed, several million forced out of their homes and big industrial estates and key infrastructure destroyed. Monsoon rains have pounded south-east Asia since July, wiping out large swaths of rice crops and raising the spectre of “serious food shortages”, according to the UN’s Food and Agriculture Organisation.
Moody’s, the credit rating agency, estimated on Monday that the floods would cost Thailand more than Bt200bn ($6.5bn), or 2 per cent of gross domestic product. But it predicted that while state finances would suffer, “the government will have ample fiscal space to absorb flood-related costs without prompting a permanent deterioration in its debt ratios”.
Thailand’s industrial heartland, to the north of Bangkok, has already been deluged by the surging waters, forcing the closure of more than 1,000 factories and leading to the loss of more than 600,000 jobs. Japanese carmakers, many of which have set up regional manufacturing bases in Thailand, have been badly hit as well as hard-disc drive producers, leading to a global shortage of a key component in computers.
On Monday, Mazda and Toyota, the Japanese car makers, and Toshiba, the Japanese electronics maker, become the latest in a long and growing list of major manufacturers to extend production shutdowns at facilities that have been affected by the floods.
Ms Yingluck, a political novice who became Thailand’s first woman prime minister in August, has come under increasing political pressure from critics who say her populist government has lacked co-ordination and released inaccurate information, particularly about the fate of Bangkok.
But analysts believe that the first crisis of her term in office has also given Ms Yingluck the opportunity to demonstrate her leadership.
Thitinan Pongsudhirak, a political scientist at Bangkok’s Chulalongkorn University, argued that the scale of the flooding, ineffective state agencies and poor long-term planning have hindered Ms Yingluck’s ability to respond.
“She is obviously doing her best but the question is whether her best is good enough,” he said. “The people who did not support her from the outset will seize on the deluge to destabilise her rule.”
However, analysts believe Ms Yingluck’s opponents in the Democrat party, which was previously in power, are playing a dangerous game as they must also take the blame for the long-term planning failures that have exacerbated the flooding and the damage has that followed in its wake.
“There has been a much broader political and administrative failure in terms of the management of water, the management of dams and the building of suburbs and factories on wetlands so that the drainage that Thailand has relied on in the past is not available any more,” said Michael Montesano, an expert in Thai politics at Singapore’s Institute of Southeast Asian Studies.
No comments:
Post a Comment