Tag: Boomergeddon
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Virginia Unfunded Liabilities: $5.4 Billion
Here is more confirmation, as if any were needed, that the Commonwealth of Virginia is running hidden deficits in the form of unfunded pension and retiree healthcare liabilities… Truth in Accounting, a nonprofit devoted to transparency of government finances, gives Virginia a grade of “C” for its financial practices. By the standards of the 50…
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Caution: These Links Will Ruin Your Sleep
A campaign pitch for an incumbent member of Congress you will not hear: You are getting $4 worth of government for every $3 you pay in taxes and fees, and the other buck is piled on as debt for your kids and grand kids to pay! You should vote me back in! The Treasury Department’s…
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Chesterfield’s $50 Million Fiscal Landmine
Virginia and its local governments are constitutionally obligated to balance their budgets ever year. But as I have repeatedly pointed out, there are many ways to duck that obligation. One is to rack up unfunded pension liabilities. Another is to under-fund maintenance. Today we discover that even a highly reputed county with a AAA bond…
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Oops, Where Did that $3-4 Million Deficit Come From?
The idea behind the Commonwealth Center for Advanced Manufacturing (CCAM) is fantastic: Create a facility where Virginia manufacturers and universities can collaborate on advanced-manufacturing research projects that all participants can share. Research staff for the Prince George County-based facility are expert in everything from “vertical diffusion furnaces” and “robot arm-based automation cells” to “thermal spray…
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A Thoughtful Reminder of Another Pension Landmine
A recurring theme of Bacon’s Rebellion is that billions of dollars of liabilities lurk in the balance sheets of Virginia’s state/local government and quasi-governmental organizations — from the $20 billion unfunded pension liability of the Virginia Retirement System to the $3.5 billion unfunded pension liability of the Washington Metro system. Some don’t get the attention they…
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Hurricanes, Risk, and Fiscal Collapse
John Rubino, publisher of Dollarcollapse.com, and I think a lot alike when it comes to the inevitable fiscal collapse of the United States. The country (indeed the globe) is riding high today on a giant credit bubble right now, but sooner or later the bubble will pop and the economy will crash. If you buy…
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Virginia and the Next Global Debt Crisis
Ten years ago the Lehman Brothers debacle precipitated the financial meltdown we associate with the Great Recession, and the financial media are full of retrospectives. A key question is what lessons we learned from the epic failure. The main conclusion drawn, according to Daniel J. Arbess in the Wall Street Journal today, appears to be…
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Graph of the Day: Virginia’s Declining Fertility Rate
The number of births in Virginia continues declining, reaching the lowest level in years in 2017 — only 100,248. A decade before, births had numbered 108,884. Demographers Savannah Quick and Shonel Sen at the Demographics Research Group at the University of Virginia attribute the overall dip in fertility decline to a dramatic decline for 15-…
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Unfunded Pension Liabilities a Benefits Problem, Not Just a Funding Problem
In the analysis of unfunded state pension liabilities, there are two main components: assets and liabilities. Here in Virginia, most attention is focused on the asset side of the equation — how much money have state and local governments set aside to pay for retiree benefits, and how well is the Virginia Retirement System managing…
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Moody’s Reaffirms AAA Rating. Don’t Get Cocky, Virginia.
Moody’s Investors Service, one of the nation’s three bond rating agencies, has reaffirmed Virginia’s AAA bond rating and stable financial outlook, the Richmond Times-Dispatch reports. Moody’s had issued warnings that Virginia’s hallowed AAA status was looking fragile, due mainly to a sharp draw down in previous years of the Commonwealth’s budget reserves. The Revenue Stabilization…
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Seven Years and Counting…
Medicare’s Hospital Insurance Trust Fund (HI) will be depleted in seven years — three years sooner than forecast previously, according to the 2018 Annual Report of the Medicare Boards of Trustees. By 2026, Medicare Part A, which covers hospital payments, will be running a $52 billion annual deficit, a gap that will increase rapidly in…
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Virginia’s Hidden Deficit: the Unemployment Trust Fund
There are many measures for gauging a state’s fiscal condition. The most commonly cited is the condition of its General Fund: Is the state balancing its budget? Digging deeper, one can examine the degree to which a state is funding (and falling short of) its pension obligations. And one can track the extent to which…
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No Compromise on the AAA Rating
A downgrade of Virginia’s AAA credit rating could cost the Commonwealth between $33.9 million to $72.7 million in additional interest costs on its roughly $4.8 billion in state debt, says Secretary of Finance Aubrey Layne. “If S&P downgrades and the other two follow, which they usually do, it could cost us millions,” Layne said, as…
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Can the U.S. Outgrow Its National Debt?
In previous posts I have described the Republican-backed 2017 Tax Cuts and Jobs Act as a Hail Mary pass, a gamble that by boosting economic growth the United States can outgrow the burden of chronic deficits and a rapidly accumulating national debt. I wasn’t optimistic, but I was willing to wait and see. After the…
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State Pension Problems Still Getting Worse
Another year, and another analysis by the Pew Charitable Trusts on the deteriorating condition of U.S. states’ public employee pension plans. Drawing on data from 2016, Pew concludes that despite scattered actions by the 50 states to shore up their pensions, the funding gap only got worse. In 2016, the state pension funds in this…