New Jersey Voters Refuse to Build Casinos Outside Atlantic City
The Week in Public Finance: NYC's $3 Billion in Giveaways, Weak Revenues and Jacksonville's Pension Fix
A roundup of money (and other) news governments can use.
New York City is the first major government this year to release what it gives up in economic development-related tax incentives to corporations, following new financial reporting requirements. In its annual financial report, the city disclosed that it waived more than $3 billion in potential tax revenue in 2016 alone, mostly in uncollected property taxes.
The tax abatements represent a little under 4 percent of the city’s nearly $80 billion in general fund revenue in fiscal 2016, which ended on June 30.
The most expensive abatement was for the commercial conversion program, which cost nearly $1.3 billion in forgone revenue last year. The program encourages new housing in the city by offering a property tax discount on new construction or on commercial space that was converted into residential housing. Developments have to meet certain requirements, like reserving one-fifth of the units for affordable housing.
Georgia's Plan to Take Over Failing Schools Faces Long Odds
The Week in Public Finance: Petitioning for Bankruptcy, Lost Airbnb Revenue and Downgrading New Mexico
'Put Bankruptcy on the Ballot!'
Activists in financially beleaguered Scranton, Pa., are petitioning for a ballot initiativethat would let residents decide if the city should file for bankruptcy. It’s a first-of-its-kind petition and reflects the ongoing frustrations of a city that's been "fiscally distressed" for two decades.
Scranton is one of Pennsylvania’s Act 47 cities, which designates it as fiscally distressed and opens it up to aid and other resources from the state. The designation also means that the city must comply with certain fiscal requirements, such as developing a recovery plan.
But Act 47 has had its problems, the biggest being that it doesn’t seem to provide enough oversight.
To Limit Debt or Make It Limitless? 2 States’ Voters Will Decide.
The Week in Public Finance: School Funding's Lost Decade, Teacher Pension Pressures and More
A Lost Decade for Public School Kids
New data this week shows that nearly half of all states are providing less in per-pupil funding today than they were before the recession in 2008. Taking inflation into account, eight of the 23 states have cut funding per student by about 10 percent or more, according to a report by the Center on Budget and Policy Priorities (CBPP).
What's more, five of those eight -- Arizona, Kansas, North Carolina, Oklahoma, and Wisconsin -- have cut education funding while also cutting income taxes, resulting in tens or hundreds of millions of dollars in lost revenue each year.
In Need of Education Funding, States Look to Customers and Corporations
The Week in Public Finance: New Jersey's Tax Plan, Online Lending Myths and Cities' Recovery
New Jersey: Between a Rock and a Hard Place
Moody’s Investors Service has panned New Jersey’s plan to beef up its transportation funding, mainly because it does so at the expense of other state programs. The legislature this month approved a 23-cent gas tax increase, which will raise approximately $1.2 billion.
But to offset the tax increase, the legislature also approved tax reductions.
City Revenues Expected to Finally Recover From Recession
But cities are still dealing with slow revenue growth and rising costs, according to a new report.
| OCTOBER 14, 2016
City revenues have struggled to get back to pre-recession levels. But things may finally be looking up.
On Thursday, officials announced that they expect city incomes to fully recover by next year -- a decade after the start of the Great Recession.
It’s by far the longest revenue recovery period in more than a generation as the bounce back period after the previous two recessions was done in half the amount of time. Currently, officials estimate that city revenues (accounting for inflation) have reached 96 percent of what they were in 2006, the year before the recession started.
The Week in Public Finance: New Jersey's Tax Plan, Online Lending Myths and Cities' Recovery
| OCTOBER 14, 2016
New Jersey: Between a Rock and a Hard Place
Moody’s Investors Service has panned New Jersey’s plan to beef up its transportation funding, mainly because it does so at the expense of other state programs. The legislature this month approved a 23-cent gas tax increase, which will raise approximately $1.2 billion.
Privatization May Be Worsening Inequality
A new study suggests outsourcing government services can disproportionately impact low-income users' finances, health and safety.
| OCTOBER 13, 2016
As state and local governments grapple with fewer resources for things like infrastructure or social services, many of them have opted to contract those responsibilities out to the private sector. But a new report warns that doing so may be widening the gap between the haves and the have-nots.
The Week in Public Finance: Wells Fargo's Punishment, a Surprising Study and Kansas' Forecasting Blues
Governments Punish Wells Fargo
Some governments are temporarily cutting ties with Wells Fargo thanks to a scandal involving thousands of unauthorized accounts.
This week, Illinois and the city of Chicago announced they're joining California and suspending their relationship with the bank for at least one year. Meanwhile, Massachusetts, Oregon and the city of New York are reviewing their business ties with the firm.
In California, the Battle Over Bilingual Education Is Back
Houston’s Plan to Cut Pension Costs in Half Overnight
The Week in Public Finance: Troublesome Sports Arenas, Buying Muni Bonds and California's Tenuous Recovery
| SEPTEMBER 23, 2016
Nebraska Town Hit With 'Superdowngrade'
The tiny town of Ralston, Neb., was surprised by a seven-notch "superdowngrade" this week when its arena bonds were sent hurdling into junk rating territory. S&P Global Ratings said it moved the rating from A+ to BB because of the financial strain the building is placing on the city of roughly 6,000 people.
The Week in Public Finance: Pensionomics, Hidden Bank Loans and Private Equity Fees
| SEPTEMBER 16, 2016
Do Pensions Help the Economy?
A new study on how pensioners spend their money will likely give a boost to those who want to keep traditional, defined benefit pension plans in the public sector.
Published this week by the nonprofit National Institute on Retirement Security (NIRS), the analysis on pension retiree spending in 2014 estimates it resulted in $1.2 trillion in total economic output. The total is based on about a half-trillion in benefits paid to public and private pensioners in 2014. State and local pension benefits account for about half ($253 billion) of those benefits.
Pension Crisis: Could Buyouts Be a Solution?
The Week in Public Finance: Unsustainable Health-Care Costs, an Oil State Not in Crisis and More
| SEPTEMBER 9, 2016
Retiree Health-Care Liabilities Are Dramatically Increasing
State governments’ cost of keeping all their promises to retirees is “unsustainable.” That’s the conclusion of a report this week by S&P Global Ratings that looked at the growth in total retiree health-care liabilities across state governments.
In just two years, so-called "other post-employment benefit" (OPEB) liabilities have increased 12 percent, to $554 billion for states alone. This reverses a trend of stable to declining liabilities found in S&P’s past two annual surveys.