Governors Fear Loss of Bond Tax Exemption
Municipal bonds finance a huge portion of the infrastructure building and repair undertaken throughout the country. (AP) Correction at end A panel of top tax policy analysts has warned the nation’s governors they face an ongoing risk of increased borrowing costs if President Obama and Congress curb or eliminate the tax exemption on municipal bonds […]
Illinois Passes on Pensions, Boots Lawmaker
Illinois lawmakers emerged from a special session Friday (August 17) with one fewer lawmaker and no plan to address the state’s soaring pension obligations. Despite Governor Pat Quinn’s late efforts to float anything — even a watered-down proposal — past the gridlocked legislature, lawmakers in both parties refused to take the bait. As a result, […]
Illinois Lurches Forward, One Budget Crisis at a Time
Illinois Governor Pat Quinn (AP) CHICAGO — Every time it seems Illinois might be pulling out of its budgetary tailspin, a new crisis hits. The latest one, which Democratic Governor Pat Quinn wants lawmakers to address during a special legislative session Friday (August 17), is the state’s ballooning annual pension payment. Those payments have become […]
Are States’ Unemployment Insurance Loans Dragging Down Economies?
States are still paying off federal loans they needed to issue unemployment checks during the recession. Here, job seekers attend a career fair in Mississippi. (AP) States are slowly paying off the billions of dollars they borrowed to keep their unemployment trust funds afloat during the recession, but those debts are challenging a system created […]
Infographic: S&P State Credit Ratings, 2001–2012
States sell general obligation bonds to investors to pay for big-ticket projects such as roads, schools, parks and other public works. Private, independent credit rating agencies, including Standard & Poor’s, evaluate states’ financial health to determine their ability to repay the principal and interest. They assign a rating to the bonds; the higher the grade, […]
Will States’ Credit Suffer From S&P Federal Downgrade?
When Moody’s Investors Service announced last month that a downgrade of the federal government’s credit rating could have a ripple effect in some states , governors and other officials immediately took notice. “We’re furious,” said Governor Bob McDonnell of Virginia, one of five states put on heightened alert by Moody’s. McDonnell blamed politicians in Washington, […]
Do States Control Their Fiscal Destiny? Not as Much as They May Think.
California, Florida, Illinois, New York and Texas elected five very different governors last fall, but they all agreed on one thing: their capacity to solve their states’ problems. “Once we take the right steps,” Florida’s Rick Scott said in his inaugural address, “I am absolutely convinced that Florida will become the most exciting place in […]
GOP Governors Are Key for Obama Debt Plan
State bailouts are the subject of much debate on Capitol Hill these days. On Wednesday (February 9), a House committee held a hearing on the possibility of allowing struggling states to declare bankruptcy, much like businesses or municipalities. The idea has been pushed by a small group of conservatives, including former House Speaker Newt Gingrich, […]
How a Small Town’s Bond Bust Led to a Model State Debt Policy
Courtesy Tennessee Comptroller’s office Tennessee Comptroller Justin Wilson says many local governments do not have sound debt policies. He led an effort to end conflicts of interest and set guidelines on borrowing practices. State treasurers do not usually intervene in the debt decisions of local governments. But when Justin Wilson took over as Tennessee’s comptroller […]
Future of Popular Build America Bonds Program in Doubt
The fate of a popular federal stimulus borrowing program that state officials say created thousands of jobs and launched hundreds of transportation, public safety and water and sewer projects may hinge on whether Congress extends several unrelated tax breaks before the end of the year. Build America Bonds , under which state and local […]
Painful Choices for Incoming Crop of State Leaders
Buffeted by huge deficits, higher taxes and service cuts, voters are deeply frustrated with the efforts of state officials to bring budgets in line. Although they would rather endure further spending reductions than see taxes go any higher, they are nevertheless willing to countenance some revenue increases if they can be convinced that the money […]