Tag: Boomergeddon
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Playing the Racism Card… Just Pathetic
In other Petersburg-related follies… Petersburg Mayor W. Howard Myers has told fellow City Council members that the attacks on his leadership are motivated by racism and partisanship. “I will as a representative of Ward 5 and as major duly to my right hand, serve the public without blemish and from scare tactics from a few racists[s]…
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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…
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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…
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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,”…
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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…
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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…
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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…
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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…
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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…
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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…
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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…
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Boomergeddon Update: Medicare HI
by James A. Bacon The Hospital Insurance Trust Fund, one of the four major components of the Medicare program, will run out of money in 2028 — two years earlier than previously projected. That appraisal comes from the Medicare Board of Trustees, which, the last time I checked, is not funded by the Koch Brothers. The news…
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Virginia Ranks 19th for Fiscal Condition
Virginia’s state finances are nothing to brag about, according to data contained in the Mercatus Center’s 2016 edition of “Ranking the States by Fiscal Condition.” The Old Dominion gets below average scores for cash solvency (cash on hand to pay short-term bills), and middle-of-the-road scores for budget solvency and long-run solvency. The state scores above…
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Reader Alert: Another Jeremiad about Debt and Risk
Holman W. Jenkins, Jr., at the Wall Street Journal reminds us how countries around the world, including the United States, are doubling down on debt to stave off recession: The Richmond Fed’s “bailout barometer” shows that, since the 2008 crisis, 61% of all liabilities in the U.S. financial system are now implicitly or explicitly guaranteed…
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Mala Suerte, Puerto Rico
by James A. Bacon The U.S. territory of Puerto Rico, like several American states, has forged a facsimile of prosperity by borrowing and spending beyond its means. Earlier this year, independent bond-issuing authorities began defaulting on their debt. Investors fear the territory will fail to make payments on General Obligation bonds coming due in May and June. Not…