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    Friday
    Jan272017

    The Week in Public Finance: What We Don't Know About Sanctuary Cities' Funding, New Reasons to Save and More

    A roundup of money (and other) news governments can use.

    BY  JANUARY 27, 2017

    What We Don't Know About Trump's 'Sanctuary City' Order

    On Wednesday, President Donald Trump took his first move to defund cities that refuse to cooperate with federal efforts to deport undocumented immigrants. Trump signed an executive order directing the Secretary of Homeland Security to look at federal grant funding to cities “to figure out how we can defund those streams,” said White House Press Secretary Sean Spicer.

    Many of the nation’s largest cities -- including Chicago, Los Angeles, New York City and San Francisco -- are immigrant sanctuaries and have said they won’t back down from their policy.

    Click to read more ...

    Wednesday
    Jan252017

    Despite Budget Shortfalls, Some Governors Call for Tax Cuts

    In addition to new tax breaks, some states are also considering raising gas and sin taxes.

    BY  JANUARY 25, 2017


    Nebraska Gov. Pete Ricketts speaks during a news conference. (AP/Nati Harnik)

    About half of the states are facing budget shortfalls this fiscal year, but many governors are still pushing to cut taxes in their proposed 2018 budgets.

    The proposals vary in scope but generally fall within two categories: comprehensive and targeted.

    Nebraska Gov. Pete Ricketts' proposal is of the comprehensive variety and may be the most aggressive call for tax cuts so far. He is asking for property and personal income tax cuts to be phased in beginning in 2019 -- even as the state faces a $900 million budget gap. Property taxes would be reduced via a new valuation formula and income tax breaks would kick in incrementally and only in years when state revenue grows by more than 3.5 percent.

    On the whole, most of the comprehensive proposals are part of ongoing efforts.

    Click to read more ...

    Friday
    Jan202017

    The Week in Public Finance: Hartford in Crisis, Pension Rates Move Down and More

    Bad News for Hartford, Conn.

    A report from the Yankee Institute this week warned Connecticut’s capital is careening toward insolvency. “Hartford will likely face bankruptcy unless the state intervenes in the coming months,” wrote Stephen Eide, a senior fellow at the Manhattan Institute who authored the report.

    Connecticut has repeatedly struggled with slow growth and state budget deficits, but that economic imbalance is even more exaggerated with its urban centers. The report warns that Bridgeport, Waterbury and New Haven also have declining tax bases and rising pension obligations -- just not to the extent that Hartford does.

    More than one-third of Hartford residents live in poverty, the highest rate in the nation in cities larger than 100,000. What's more, the city has increased its debt and structural budget deficit to stay afloat. Between 2016 and 2018, Hartford’s debt service expenses are projected to increase from $23 million to $45 million, and then reach $60 million in fiscal 2021.

    Click to read more ...

    Friday
    Jan132017

    The Week in Public Finance: Trump's Infrastructure Plan, Risky Pensions and NYC's Surprising Fiscal Health

    A roundup of money (and other) news governments can use.
    BY  JANUARY 13, 2017

    How Will Trump's Infrastructure Plan Affect the Economy?

    Economic impact estimates are all over the map when it comes to how much of an affect President-elect Donald Trump’s 10-year $1 trillion infrastructure proposal will have on the economy. To that end, two reports came out this week that come to completely different conclusions.

    The first, by Georgetown University, says that Trump's plan could create as many as 11 million jobs. However, it cautions, the additional spending in combination with proposed tax cuts and other economic policy shifts could “overheat the economy” by increasing inflation and setting the stage for further interest rate hikes.

    The Tax Foundation had a much more modest take. This is partly because the report assessed the varying degrees of economic impact the proposal would have depending on what other policy measures are implemented. The foundation looked at the impact of a theoretical $500 billion investment by the federal government through five funding mechanisms: borrowing, cutting government spending, raising excise taxes, raising the top tax rate on individual income and raising the corporate income tax.

    Click to read more ...

    Wednesday
    Jan112017

    Have States Reached Their Savings Limit?

    After several years of growth, the amount states are socking away in rainy day funds has slowed.
    BY  JANUARY 11, 2017

    Rainy day savings deposits appear to be plateauing.

    After six straight years of squirreling away money, budgeted figures for fiscal 2017 show a slight dip in rainy day fund balances across the 50 states. States now have a median 4.9 percent of annual expenditures saved for the fiscal year, down from 5.1 percent the previous year.

    What's more, four states -- Illinois, Nevada, New Jersey and North Dakota -- now show no budget reserve funds, up from two states last year. The overall shift is a signal that tighter financial times could be ahead for states as a whole.

    The findings are based on Governing's analysis of projected 2017 budget data from the National Association of State Budget Officers. Given that roughly half of states are now expecting budget shortfalls for 2017, budget reserve balances could dip more than projected.

    Click to read more ...