New York State Comptroller’s office evades questions about recent Goldman Sachs deal

With much fanfare, the Office of New York State Comptroller Thomas DiNapoli announced last month a “strategic partnership” between the Common Retirement Fund (CRF) and Goldman Sachs Asset Management (GSAM) to invest $2 billion in global equity strategies.
The CRF manages the assets of the New …

Philly: More dubious budget reporting from NYTimes

The NY Times finally decided to jump in with its take on the controversial story of Philadelphia’s school reform commission cancelling the teachers’ contract. Not surprisingly, in a story largely sympathetic to teachers (pointing out, for instance, that they make less in salary than neighboring suburban teacher) the Times ignores most of the relevant fiscal facts…

Health care + pensions equal insolvent NJ

New Jersey has gotten a lot of publicity lately because Chris Christie has balked at meeting the state’s extraordinary pension burden, arguing that further reform of the system is necessary. But as a recent NJ report makes clear, Jersey really has a problem of expensive health care for workers and retirees on top of bulging pension debts, which have raised the cost of employee benefits in NJ well above the norm for states. The reason Jersey isn’t paying all of its benefit costs is because it couldn’t possibly afford to…

Election 2014 in Illinois: scant cause for optimism

The next Illinois governor better like a challenge, because the winner of the November 2014 gubernatorial election is going to get one.
Illinois suffers under some of the worst government finances in the nation.  Truth in Accounting’s latest analysis shows Illinois with a “Taxpayer Burden” (a …

Unreformed public pensions keep eroding Pennsylvania’s credit

On September 25th, Standard & Poor’s became the last among the Big Three credit-rating agencies to downgrade Pennsylvania’s general obligation (GO) debt. The state was taken down a notch to AA- with a stable outlook – still in safe “investment-grade” territory.  In explaining the downgrade, …

Watch door to bankruptcy slam shut to protect pensions

In the wake of Judge Klein’s ruling last week that Stockton could cut pension debt in bankruptcy, fiscal reformers and conservative commentators where quick to assume, somewhat naively, that this ruling changed everything and would force recalcitrant unions to the negotiating table. The truth, however, is that many states put up numerous roadblocks to municipal bankruptcy and the real import of the ruling was that states where public unions dominate were likely to throw up even more blocks. Now we’ve seen the first indication of this…

Bad pension ideas migrate to desperate NJ

hevesi6n-2-webFor two decades NJ has been a repository of some of the worst government pension practices in nation. Now in a desperate attempt to find answers to its huge pension problems, policy makers seem willing to consider bad ideas from elsewhere, perhaps reflecting how little the state understands about how it got into its mess in the first place. The latest notion is that neighboring NY managed to avoid similar problems thanks to its comptroller’s office, which somehow kept the state out of pension trouble. Ha!

Philly goes nuclear, cancels teachers’ contract

nocontractIn a startling move against an intransigent union, the special commission that manages the Philadelphia school system has cancelled the system’s teachers’ contract and imposed reductions on benefits costs to salvage the budget of the badly indebted system. The move, in which the Philadelphia School Reform Commission invokes emergency powers, comes after the teachers’ union spent more than a year resisting concessions…

Michigan gubernatorial campaigns fight over alleged education cuts

The 2014 Michigan gubernatorial election should be a referendum on the major changes to Michigan Governor Rick Snyder’s administration. Unfortunately, the debate is saturated instead with false claims of education cuts.
Snyder’s opponent, former congressman Mark Schauer, centered his campaign around the allegation that Snyder “cut $1 …

Fiscal gimmickry 101

In yesterday’s post, I alluded to the fact that there may be some dispute as to whether, under Pennsylvania law, a city’s budget really is balanced. That’s because Pennsylvania has no rules against cities counting debt issuance, “interfund transfers” and reimbursements as revenue.  This leads …