Category: Government Finance
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Maybe We Should Call It the “Cloudy Day” Fund
The General Assembly managed to close a $1.5 billion budget shortfall in the budget it just passed, but don’t credit legislators with a lot of fiscal discipline. More than a third of the gap was closed by drawing down Virginia’s Revenue Stabilization Fund, more commonly known as the “rainy day” fund. The idea behind the…
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No Magical Solutions for Trump
Someone in the national press corps is finally focusing on an issue less ephemeral than Donald Trump’s tweets: the fiscal disaster that looms if all of the president’s programs are enacted. Writes Rachel Blade and Josh Downey in Politico: “I don’t think you can do infrastructure, raise defense spending, do a tax cut, keep Medicare, Medicaid…
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More Hidden Deficits: Bad Bridges and Bad Metro
Update on America’s hidden deficits: Nearly 56,000 bridges across the country are structurally unsound, according to the American Road and Transportation Builders Association (ARTBA), as reported by USA Today. More than one in four of the bad bridges are at least 50 years old and have never had major reconstruction work, according to the ARTBA analysis.…
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Here’s an Idea — Let’s Impose Unfunded Mandates on Shrinking School Districts
There seems to be no end to the ideas that Do Gooders have to improve conditions in Virginia’s schools. And there’s always someone in the General Assembly willing to submit a bill to force Virginia school districts to adopt those feel-good ideas without providing any money to pay for them. This year, the Do Gooders…
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Thinking Sensibly about Virginia State Police Salaries
Virginia State Police troopers would receive a $7,000 pay raise — a 22.3% boost for starting salaries — under a budget proposal that also would provide a 3% pay raise for all state employees, reports the Richmond Times-Dispatch. The dramatic pay hike comes in response to deteriorating morale and a surge in state trooper departures. Is…
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Virginia Higher Ed Faces Legislative Backlash
Frustration with Virginia’s higher education establishment boiled over during a press conference in the state Capitol building this morning as 15 senators and delegates from both political parties expressed their intention to curtail tuition hikes at public colleges and universities. Legislators have introduced some 20 bills so far in the 2017 session addressing affordability and…
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Chesterfield Finds $83 Million Unfunded Liabilities
Our society is riddled with unfunded liabilities. Nowhere is the magnitude of short-term thinking more egregious than the federal government. As case in point, the U.S. military has put off maintenance and repairs to the point where we don’t have the money for the military we have, much less the military we would like to have. “The…
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You’ve Heard of Unfunded Pension Liabilities. Unfunded Infrastructure Liabilities Are Huge, Too
Lafayette, La., like many other U.S. cities, is running a huge hidden deficit in the form of backlogged infrastructure maintenance. Charles Marohn, founder of the Strong Towns movement, has done a brilliant job of illuminating the time bomb ticking away in municipal budgets around the country. This week he has honed in on Lafayette, a midsize…
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How Budget Cuts Will Affect Virginia Colleges
Proposed cuts in state support for higher education in Virginia next fiscal year will effectively wipe out the extra money the General Assembly had allocated to public colleges and universities at the beginning of the budget cycle, Peter Blake, director of the State Council for Higher Education in Virginia (SCHEV), told his board yesterday. “We’re…
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Budget Shortfalls Will Dog States for Decades
Over the next 44 years, state and local governments face chronic budget shortfalls driven by Medicaid spending, government employee health care costs, and underfunded pensions, warns the U.S. Government Accountability Office (GAO) in a report issued earlier this month. “Absent any intervention or policy changes, state and local governments are facing, and will continue to face,…
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Medicaid, the Blob that Ate the Budget
Details on that runaway Medicaid budget… Spending per Medicaid enrollee has been relatively flat the past five years, having increased less than 0.4% annually (adjusted for inflation) between FY 2011 and FY 2015. The cost driver has been enrollment, which increased 16.5% over the same period, according to a Joint Legislative Audit and Review Commission…
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Tackling Virginia’s Hidden Budget Deficit
Restoring a pay raise for state employees outranks pension reform in the recommendations of the Commission on Employee Retirement Security and Pension reform. The legislative commission voted yesterday to prioritize a 3% pay raise for state employees that Governor Terry McAuliffe has proposed putting on hold in the face of $1.5 billion revenue shortfall. House Speaker…
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Alexandria’s Capital Spending Problem
Alexandria City Manager Mark Jinks is right: It’s probably a good idea to put on hold the $1.4 million design work for a proposed $20 million expansion on the Chinquapin Recreation Center pool, as well as series of $25,000 “way-finding” signs. The city has massive capital spending commitments that are not so discretionary. As reported by…
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Virginia Dodged the Medicaid-Expansion Trap
The 24 states lured into Medicaid expansion under provisions of the Affordable Care Act (Obamacare) collectively experienced twice as many new enrollments as they expected, according to a new report by the Foundation for Government Accountability. While the federal government has picked up the tab for 100% of the costs until now, states will start paying next year…
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Quantitative Squeezing
It’s nice to see mainstream media highlighting an issue that I’ve been hammering here at Bacon’s Rebellion for a couple of years now. A front-page Wall Street Journal article discusses how the zero-interest rate policies of central banks around the world are crippling returns on pension portfolios, making it difficult for nations and municipalities to meet…