EMPLOYEE COMPENSATION
Remember Wimpy? His famous line was: "I'll pay you tomorrow for a hamburger today." That is, in effect, the practice of states
Continue reading The political problem of the "Wimpy" state.
A new report by New Jersey's State Commission of Investigation exposes a common practice of "official" or "release" time and has rightly made headlines. See here, here, here, here, and here. The practice entails paying public employees to work for their union. Over a five year period, the report found, the Garden State paid more than $30 million for public workers to conduct union business.
Continue reading Shining a light on release time.
My take in today's WSJ on the role that pension and retiree health care liabilities in states and cities are going to play in location decisions that businesses and even residents make, because people are going to be increasingly wary of buying into these huge liabilities as they see taxes increasing because of them. Below is a chart from the Civic Federation of Chicago showing that state's growing pension costs on the budget. Those costs, as I point out, are eating up much of the $7 billion tax increase that Illinois enacted last year on residents and businesses, sparking a revolt among firms.
One of the many pathologies afflicting the public pension system in California is the practice of double-dipping, in which a state pensioner collects both retirement benefits from a previous job and a salary for new state employment. A particularly galling example of the practice has now come to light in Southern California, and as the Orange County Register's Tony Saavedra reports, this one's hard to beat for sheer moxy:
When David Noyes retired as general manager of Serrano Water District in late 2010, he dove right into his new job -- as acting general manager of Serrano Water District. His consulting contract was effective the same day as his retirement.
The 'b' word, or 'bankruptcy,' was first used provocatively in association with Los Angeles by former mayor Richard Riordan in a controversial editorial in the WSJ in May of 2010. But now the city's own Chief Administrative Officer, Miguel Santana, has raised the prospect that the City of Angels could indeed be heading for insolvency unless it does something to grab control of employee costs, including pension costs. In a stunning new report issued on Friday, Santana projected that even with an improving economy the city faces a rising deficit, which could hit $427 million by 2014 (see chart below).
Continue reading LA's harsh budget reality includes fear of bankruptcy.
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