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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…

Will NY lock in retiree health costs?

New York State and its government subdivisions have unfunded liabilities of $250 billion for promised public-sector retiree health coverage — a disproportionate share of at least $1 trillion in other post-employment benefits (OPEB) benefits promised by states and local governments throughout the country.
Incredibly, with days …

Public employee pay state-by-state

Public employee compensation is the subject of heated political debate.  Looking at national comparisons of public and private sector workers–even when making apples to apples comparisons and controlling for education, experience, and other factors–often conceal more than they reveal. A state-by-state approach is much more …

Brown talks responsibility, then expands union giveaway

Gov. Jerry Brown was echoing Ronald Reagan at his press conference last week as he touted a “responsible” balanced budget, created a rainy day fund with toughened provisions that prevent legislative raiding and ridiculed new Democratic spending proposals. He opposed plans by his party’s legislators …

Stockton must face last angry creditor

Bankrupt Stockton heads to court on Monday to win approval for its plan to exit Chapter 9, but it still has not crafted an agreement with one The-U.S.-Government-Is-Our-Biggest-Creditor-and-Other-Statisticsmajor creditor, Franklin Advisers, which is being asked to take a gigantic haircut in the case. Instead, Franklin will argue that Stockton hasn’t done enough to cut its debts, especially its pension costs.If Franklin can’t persuade U.S. Bankruptcy Judge Christopher Klein to force Stockton and Calpers to come to some kind of deal reducing the city’s pension debts…

Laborers in pitched battle against the farmworkers’ union

It was an amazing sight. About 50 farmworkers packed the California Agricultural Labor Relations Board hearing in Sacramento earlier this week to oppose the actions of the United Farm Workers union. They carried hand-made signs and demanded that the board — formed in 1975 thanks …

Everything is great in California (but don’t look too closely)

Gov. Jerry Brown continues to foster the illusion of a state on a comeback roll thanks to one little thing: The state’s day-to-day budgets are balanced with a few billions dollars showing up in a predicted budget surplus for the coming year. That’s mainly the …

State debts overshadow brightening revenue picture

20140124_100519_ssjm0127liability90The Wall Street Jr. has a story today about how improving tax collections are encouraging states to consider new spending or tax cuts. The story only nods briefly to the fact that states also have large debt problems to deal with (or ignore, as is sometimes the case). Contrast that with a sobering San Jose Mercury News story…,

California judge rebukes pension-reform initiative

Californian officials have been closely watching litigation for Measure B, the 2012 San Jose initiative — passed by 70 percent of voters — that would allow the city to roll back overly generous pension benefits and direct more money to services and less to benefits …

Cheaper pensions: How the math works for employees

In my Wall St. Journal piece this weekend I discussed how the IRS is holding up municipalities’ efforts to move workers into new, less expensive pension systems, even when employees via their union agree they’d like to make the move. I spent most of the piece on the IRS issues, but it’s worth exploring why places like San Jose and Orange County think that some workers might voluntarily agree to take less in pensions promises. Let’s look at some math…