Amid Concerns of a Recession, Pension Plan Returns Fall Short

BY LIZ FARMER | AUGUST 16, 2019 AT 4:00 AM

Public pension plans are missing their investment earnings expectations for the first time in three years, a development that could strain future state and local budgets amid rising concerns that the national economy is slowing.

Plans with more than $1 billion in assets earned a median return of 6.79 percent for the fiscal year ending June 30, according to the firm Wilshire Trust Universe Comparison Service. That’s below those plans’ median long-term expected rate of return of 7.25 percent.

The K-12 Conundrum: Americans Want More Education Funding, But Not Higher Taxes

BY LIZ FARMER | AUGUST 5, 2019 AT 7:00 PM

SPEED READ:

  • 60 percent of parents and 75 percent of teachers say education funding is too low.

  • Nearly equal shares say they would rather see cuts elsewhere than raise taxes for more school funding.

  • People are most willing to raise so-called sin taxes on alcohol, cigarettes and gambling.

  • But sin tax revenue isn't always sustainable or spent on schools.

Most people believe their public schools need more money. A new survey, however, illustrates just how wide the gap is between wanting more funding and being willing to pay for it.

This Bill Could Save Rural Governments Millions in Infrastructure Financing

BY LIZ FARMER | AUGUST 2, 2019 AT 4:00 AM

A new proposal in Congress could make financing infrastructure projects in rural America far more affordable.

Called the Municipal Bond Market Support Act of 2019, the bill would modernize a restriction on so-called bank-qualified municipal bonds that effectively limits small governments’ access to cheaper borrowing rates in the municipal market.

Kentucky's New Pension Law Marks Unprecedented Reforms

BY LIZ FARMER | JULY 25, 2019 AT 5:31 PM

After several failed attempts and a special legislative session, Kentucky -- the state with the worst-funded pension system -- now has a plan to ease the financial burden that employees' retirements are taking on quasi-governmental agencies.

In signing the pension reform bill on Wednesday, Republican Gov. Matt Bevin said it provides "much needed financial relief" and "a viable path forward for our mental health agencies, rape crisis centers, local health departments and other community agencies."

Support Grows for Marijuana Banking Bill in Congress

BY LIZ FARMER | JULY 24, 2019 AT 4:13 PM

An important issue for the future of marijuana businesses won crucial support this week on Capitol Hill. Several U.S. senators expressed support for giving banking access to the billion-dollar marijuana industry, which deals almost exclusively in cash.

Marijuana is legal in 33 states but still illegal under federal law, so any bank that handles marijuana money can be charged with money laundering. That threat makes it difficult for most growers and sellers to get a bank account for their business.

What Crisis? The Case for Not Panicking Over Pension Debt.

BY LIZ FARMER | JULY 19, 2019 AT 4:00 AM

Over the past decade, public retirement costs have spiked while governments' unfunded liabilities --now totaling more than $1.2 trillion -- have continued to grow.

But according to research that debuted this week, lawmakers shouldn’t worry too much about accumulating pension debt. “There’s an assumption that fully funding pensions is the right thing to do,” said the Brookings Institution’s Louise Sheiner at the paper’s presentation. "Most of the work in this area has been about calculating how unfunded these plans are [and] that’s led to a lot of concern that these plans are in a huge crisis.”

5 States Still Don't Have a Budget. Here's Why.

BY LIZ FARMER | JULY 17, 2019 AT 4:00 AM

SPEED READ:

  • Massachusetts, New Hampshire, North Carolina, Ohio and Oregon still haven't passed budgets for fiscal year 2020.

  • Moody's Investors Service has warned that the delay could hurt local governments, school districts and hospitals.

  • Late budgets are unusual in Ohio, but that isn't the story in Massachusetts and Oregon where they've become pretty common.

More than two weeks after the start of the fiscal year in most states, five still don’t have a budget. In most cases, policy debates have held things up -- and that's causing instability in a few places.

How Nevada Plans to Solve the Marijuana Banking Problem

BY LIZ FARMER | JULY 12, 2019 AT 4:00 AM

Nevada hopes to be the first state to create its own banking system for the booming marijuana industry, which has generated more than $150 million in tax revenue since 2017, according to Nevada Treasurer Zach Conine’s office.

Since the drug is still illegal under federal law, most banks won’t accept cannabis businesses as clients. As a result, the multimillion-dollar industry is mainly a cash business -- at least for now.

In Absence of Federal Money, Local Governments Spend Millions to Help Asylum Seekers

BY LIZ FARMER | JUNE 28, 2019 AT 4:00 AM

SPEED READ:

  • Since President Trump ended the so-called safe release program last fall, local governments have been picking up the costs of handling asylum seekers.

  • The expenses have cost San Diego County, Calif., an estimated $2.3 million so far.

  • The problem isn't just along the southern border.

As Congress enters a standoff over a $4.6 billion border aid bill, scores of local governments say financial relief can’t come fast enough.

A Year After Online Sales Tax Ruling, Are States Reaping More Revenues?

BY LIZ FARMER | JUNE 21, 2019 AT 4:00 AM

One year after the U.S. Supreme Court overturned a decades-old ban on states collecting sales taxes from online sellers, nearly every state has instituted a tax.

The swift and relatively painless transition has been a strong rebuke to the argument that requiring online sellers to remit sales taxes to 40-some states would be too cumbersome for states and sellers. “It’s absolutely amazing that just one year in, we’ve seen that kind of widespread geographic coverage,” says Charles Maniace, vice president of regulatory analysis for the consulting firm Sovos.

Late State Budgets Are Less Common This Year. There's 2 Big Reasons for That.

BY LIZ FARMER | JUNE 19, 2019 AT 4:00 AM

SPEED READ:

  • More states have passed or are close to passing a budget compared to this time two years ago.

  • The rise of one-party states and of state revenues has eased the budget process.

  • Some states may pass their budgets late, including New Jersey and Pennsylvania.

With less than two weeks before the new fiscal year starts for most states, there has been relatively little of the last-minute drama that’s dominated budget debates in recent years.

Final IRS Rules Leave States Few Options for Evading the SALT Cap

BY LIZ FARMER | JUNE 13, 2019 AT 4:20 PM

The IRS has officially blocked one of the ways that high-tax, Democratic states are letting residents circumvent limits on tax deductions.

The 2017 federal tax overhaul imposed a $10,000 cap on state and local tax (SALT) deductions, which can increase what some owe in federal taxes. In response, some states changed their rules to let people "pay" some of their state and local taxes into a state or local charitable trust because federal tax reform did not cap the deductiblity of charitable contributions

What's in the Disaster Aid Package for States and Localities?

BY LIZ FARMER | JUNE 4, 2019 AT 1:10 PM

After months of delay, Congress passed a $19 billion aid bill on Monday to help places recover from natural disasters that have struck over the last two years -- and to help cover costs of the ones yet to come.

As the political infighting wore on this year, more natural disasters -- such as flooding in the Midwest and tornadoes in the South -- bumped up the price of the legislation by roughly $5 billion. It’s now one of the most sweeping disaster aid packages ever passed and heads to President Trump for his expected signature.

Are Tech Tax Breaks Obsolete?

BY LIZ FARMER | MAY 31, 2019 AT 4:00 AM

In the tech world, most believe that the key to success is quickly adapting to change. Some cities are applying that idea to the tax incentives they give technology companies.

This week, Washington, D.C., drastically cut a tech tax break that has been in place since 2000. Earlier this month, San Francisco -- home to some of the world's biggest tech companies -- let its eight-year-old "Twitter tax incentive" expire.

The Baltimore Cyberattack Highlights Hackers' New Tactics

BY LIZ FARMER | MAY 30, 2019 AT 5:21 PM

Cyberattacks on local governments are on the rise -- and they’re becoming more sophisticated. The latest case in Baltimore, where the city is still struggling to restore critical networks more than three weeks after being hacked, could be a harbinger of things to come.     

Already this year, at least 24 municipalities have reported ransomware attacks, including Amarillo, Texas; Augusta, Maine; Imperial County, Calif.; Garfield County, Utah; Greenville, N.C.; and Albany, N.Y. That’s on pace to surpass last year’s total of 53, according to data collected by the tech company Recorded Future.