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Perspectives on public pension problems…

Over the last week, we’ve seen some conflicting reports on the status of state and local plans nationally. A McClatchy story carried in several local papers suggested that the widely cited problems have been overblown. Quick dissent followed, but let’s allow the no-problem voices to go first. From McClatchy: There’s simply no evidence that state […]

Consumer confidence falls sharply

Kriss noted that state revenue collections were falling below projections, signaling a possible large downward revision in the forecast that will be released March 17. The predictive art faces increasing challenges in a dynamic and changing global economy, as discussed here and here. Now factor in another sign of tough times ahead. U.S. consumer sentiment […]

March Economic and Revenue Update

The state’s monthly economic and revenue update (commonly called the collections report) is out today and can be downloaded here. Adjusting for the shift of certain taxpayers from quarterly to monthly reporting frequency, revenue for the February 11 to March 10 reporting month was $65 million below forecast. Adjusted revenue for the previous month was […]

No pot of gold likely in St. Patrick's Day state revenue forecast ….

That’s the theme of my column today. Given the increasing difficulty of forecasting state revenues and the significant downside risks, I suggest legislators underspend the revenue forecast this year. And, they should resist the temptation to kick the can forward with one-time gimmics. That these ideas continue to surface signals a lack of legislative seriousness, […]

Understating Public Pension Shortfalls

The Washington Post reports that while official figures put state and local public pension shortfalls at $344 billion, some economists estimate the underfunding is more in the ballpark of $1.9 trillion. The discrepancy occurs because of what the article calls the "government method of accounting."  Most states, including Washington, use the actuarial method of accounting in […]

"The young versus the old"

As I noted yesterday, Bill Gates gave a talk at the TED conference on state budgets.  Video of the talk is not yet available, but the Wall Street Journal has reported on it, here and here. Mr. Gates said states are stuck in a system that pays out vast amounts for early retirement, health care […]

Gates on State Budgets

Today Bill Gates is speaking at the yearly TED (technology, education, design) conference.  In a blog post, he says that his talk will be about state budgets: This time, I wanted to share some of what I’ve been learning about state budgets. I got interested in them because states supply most of the money for […]

Average State Employee Pay Increases

Following up on Dick’s posts yesterday and today on employee compensation, here is a chart showing annual increases in average state employee pay for the years 1999 through 2009. I have excluded higher education because tuition increases have provided extra pay increases for faculty in recent years. The underlying data come from the fiscal.wa.gov web […]

As we were saying about compensation comparisons …

… they’re not easy to get right. USA Today headlines today that Wisconsin is one of 41 states where public workers earn more than their private sector counterparts. According to the paper’s analysis of data from the U. S. Bureau of Economic Analysis, State, city and school district workers earned an average of $50,774 in […]

Sorting the data on public sector compensation …

Well before the protests in Madison, Wisconsin, touched sympathetic nerves around the country, the disparity between public and private sector employee compensation drew controversy. A headline in Sunday’s Seattle Times asks, “Have Washington state workers given their fair share?” It’s both unanswerable and, in many respects, off point. Compensation for services provided is not the […]