The Williams Report: November 2018
Indiana voters will decide this November whether or not state legislators must pass a balanced budget unless two-thirds of the legislature opt to circumvent the requirement. The amendment also requires Indiana to actuarially fund the Public Employees Retirement System and Teacher’s Retirement Fund. Supporters expect the amendment to pass, as Indiana voters have passed every constitutional amendment placed on the ballot since 1996.
Governor Charlie Baker signed the majority of a $541 million budget bill approved by the Legislature last week. Massachusetts’ new budget includes increased spending on infrastructure and school safety in addition to rainy day fund contributions that put the commonwealth’s reserves more than $2 billion.
Nebraska should have no problem closing the budget gap, but an upcoming ballot measure to expand Medicaid may make Nebraska’s fiscal position more perilous.
The state Board of Education approved a $3.35 billion budget for FY 2020 and includes an additional $440.7 million in funding from the previous year. The increase in funding is expected to go towards increasing the number of teachers, staff retention, and decreasing class size. This budget ultimately depends upon the legislature, who may find such a large increase in spending egregious.
Oregon Ballot Measure 104 aims to strengthen legislative voting thresholds required to pass tax increases. Currently, the state requires supermajorities to pass tax increases, but if the ballot measure is successful, Oregon legislators would also need supermajorities to repeal tax credits and deductions.
State leaders announced that Utah will close out the prior fiscal year with a budget surplus. A strong state economy combined with conservative budget policy enabled Utah to grow its reserve accounts by more than $107 million.
Illinois’ five pension programs share an unfunded pension debt of more than $362 billion. The state’s unfunded liability looms large in the current governor’s race, but whoever wins will be limited in what policy tools can be used to tackle Illinois’ perpetual pension problem. While state court precedent and constitutional restrictions prohibit changing many benefits, Governor. Rauner and challenger J.B. Pritzker have both featured pension policy as a central issue in their campaigns.
Kentucky’s unfunded pension liability exceeds $111 billion, a shocking figure for a pension program that was entirely funded in 2000 according to a report by PBS’ “Frontline.” The report uncovers the process of how a funded pension becomes neglected and the implications such neglect has for public employees who were promised a secure retirement.
Following the collapse of a Rhode Island hospital system pension fund, Stephen Del Sesto, a court-appointed receiver charged with handling the retirements of 2,700 workers, sued Attorney General Peter Kilmartin after Kilmartin declined to use an $8.2 million charitable fund to pay down pension liabilities. Del Sesto claims that by declining pension funds, Kilmartin failed to “mind the store.”
Moody’s credit rating of Virginia local governments illustrated generally healthy finances, despite some worrying caveats. Moody’s drew attention to higher-than-average government debt from school bonds, employee pensions, and other post-employment benefits. Moody’s also found Virginia local governments’ reliance on federal spending as an economic driver concerning.