Category: Government Finance
-
Harder Than It Looks
by James A. Bacon Elected to the Appomattox County Board of Supervisors in 2013, Sara Carter enjoyed an edge over other newby supervisors when it came to learning the intricacies of local government — she also was serving as planning director for Cumberland County not far away. An “exemplary” certification program provided by the Virginia Association of…
-
This Is What a Fiscal Meltdown Looks Like, II
by James A. Bacon The fiscal chickens are coming home to roost in Petersburg, which has racked up some $19 million in unpaid bills and is on track to run a $12 million deficit this year. The city is learning what happens when vendors are scared of not getting paid. Yesterday, we heard that Central Virginia’s regional…
-
This Is What a Fiscal Meltdown Looks Like
by James A. Bacon Here’s what happens when you run a city government like Petersburg into the ground: The regional waste management authority is threatening to suspend its trash removal and recycling services unless the city commits to a plan to repay the $632,000 it owes. City residents and businesses have been paying their monthly…
-
The Land of the Semi-Free and Home of the Brave
The Cato Institute, a libertarian think tank, has compiled a basket of some 200 metrics of fiscal, regulatory and personal freedom policies to produce an index of “Freedom in the Fifty States.” If you lean libertarian, as I do, then a Virginia score of 21 is not terribly impressive. Could be worse, but not nothing…
-
Debt to TVOP: A Fiscal Warning Flag for Virginia Localities
by James A. Bacon The financial travails of the City of Petersburg has prompted some readers to wonder if other Virginia localities are fiscal time bombs waiting to go off. There are many causes of fiscal dysfunction but one sure sign of trouble is a heavy burden of long-term debt. One way to measure that burden…
-
More Budget Foolishness Uncovered in Richmond
The City of Richmond could give a clinic on how to screw up budgets. The latest audit by City Auditor Umesh Dalal characterized previous budgets as “neither transparent nor accurate.” According to the Richmond Times-Dispatch, among the gaffes uncovered for the 12-month period ending June 30, 2015: The city budgeted only half the $1 million in…
-
Petersburg Narrowly Avoided Debt Default
by James A. Bacon The city of Petersburg’s financial woes are so bad that it nearly defaulted on a $4.5 million Revenue Anticipation Note (RAN) due June 30, but was saved at the last minute by a team of auditors dispatched by Secretary of Finance Richard D. “Ric” Brown. “It was questionable up to June 29,”…
-
We’re All Hedge Funds Now
John Rubino, author of DollarCollapse.com, is my favorite financial blogger. He did some excellent reporting for Virginia Business magazine back in the day before he went on to become a successful author and financial pundit. In a recent post, he drove home a theme commonly expressed on this blog: that the near zero-interest rate policy pursued…
-
Haywire in Haymarket
Looks like Petersburg is not the only Virginia jurisdiction to close the 2016 fiscal year with a deficit. This chart comes to Bacon’s Rebellion by way of Haymarket citizen Robert Weir. Haymarket, a town of less than 2,000 people in Prince William County, overspent by $789,000 — equivalent to a quarter of its revenue. Writes Weir: “It…
-
What Do We Do about Petersburg?
by James A. Bacon More bad news from Petersburg: The Southside city of 32,000 souls and 600 government employees has fallen more than 60 days behind on $2.3 million in pension payments. That development was reported by the Virginia Retirement System in a letter to state legislators, as required under a law that went into…
-
When Balanced Budgets Aren’t Really Balanced
by James A. Bacon The politics of fiscal implosion are ugly. Just look at what’s going on in Petersburg and Richmond. Confronted with a massive budget deficit last year in contravention of the state constitution and the prospect of a deficit in the year ahead, Petersburg City Council bravely agreed to cut the compensation of…
-
The Seven Percent Assumption
by James A. Bacon The Virginia Retirement System earned an estimated 1.5% return on its $68 billion portfolio of investments last year, spurring discussion over whether state and local governments are contributing enough to maintain the long-term financial integrity of the retirement plan for Virginia school teachers and government employees. For purposes of calculating the system’s…
-
Detroit on the Appomattox
by James A. Bacon For its 2016 fiscal year, which closed June 30, the Petersburg City Council enacted a $75 million General Fund budget. Somehow, the city managed to close the year with a $17 million deficit. Last week, council members knew the situation was dire. Staring at what they thought was a measly, $7.5 million deficit, they…
-
The Hidden Risk in Money Market Funds, and What It Means for Virginia
by James A. Bacon I’m sure many readers are tired of hearing my jeremiads about excess debt, fiscal unsustainability, and the necessity of re-engineering Virginia institutions to survive the inevitable reckoning. Well, too bad. The global economy is severely out of balance, Virginia is part of that economy, and we will suffer the consequences when the…
-
Chicago on the James?
by James A. Bacon As if the City of Richmond didn’t have enough problems, now tensions are erupting between the executive director, board of trustees, and members of the city pension fund’s investment advisory committee. Based on the account by Michael Martz at the Richmond Times-Dispatch, the rancorous relations between pension director Leo F. Griffin…