Some people pay more than their fair share of taxes -- and it’s not the rich.
The Worrisome Relationship Between Population Projections and State Spending on Kids
Should geography determine a child's chances for success? A new look at how much states spend per kid indicates that might be the case.
An analysis by the Urban Institute found that states that spend more per child tend to have better outcomes when taking public education, health and social services into account. At the two ends of the spectrum, Vermont spends nearly three times as much annually on children as Utah. The national average is $7,900 per child. A total of 14 states spend less than $7,000 per child and nine spend more than $10,000 each year.
The Income Gap Between Black and White Men Is Getting Worse
The Week in Public Finance: States in Recession, Higher Ed Winners and Losers, and Virtual Retirement
A roundup of money (and other) news governments can use.
Oklahoma's in a Recession
New economic data shows what Oklahoma officials have been fearing: The state has officially entered a recession. Revised federal Bureau of Economic Analysis (BEA) data shows that the state’s gross domestic product was negative for most of 2015.
A recession starts when there are two quarters of economic contraction. Originally, the BEA reported that Oklahoma’s economy contracted in the second quarter, grew by 0.1 percent during the third quarter and contracted again in the last quarter of last year. But the third quarter figure was recently revised downward to -0.6 percent.
Data for the first quarter of 2016 is expected to be released later this month, but according to State Treasurer Ken Miller, the prospects don’t look good.
“General indicators fail to point to any marked economic recovery at this point,” he said in his latest state economic report.
The $4.3 Trillion That States and Localities Are Missing Out On
The Week in Public Finance: A New Pension Trend, a Last-Ditch Effort to Hold Lenders Accountable and More
A roundup of money (and other) news governments can use.
A New Trend in Pension Funding?
Oklahoma Gov. Mary Fallin signed a bill into law this week that establishes a rainy day fund for the state’s pension system. Called the Pension Improvement Act, the law creates a fund that the state can use to help with its annual pension costs. There are no rules for when to put money in the fund, but the law does say money can only come out via legislative appropriation. It also says that money can only be used to help the state pay its full pension bill in tough economic years or to help fund cost-of-living increases for public employees.
Oklahoma isn’t the only state this year to create a separate fund to help with pension costs. Last month, Kentucky lawmakers started a $125 million permanent fund, which is similarly expected to help the state afford its annual pension payment. The state has asked for independent audits to help determine when the fund should be tapped.
The takeaway: Many states have rainy day funds to help supplement their budgets in years when revenues fall short. Theoretically, those funds could also help with paying a state’s pension bill. But the reality is that pension payments are often the target of cuts in tough economic times. What's more, pensions also lose money from investment losses during economic contractions.
Term Limits Don't Lead to More Women in Politics
Term limits were billed as a way to get more women to run for office. It hasn't worked out that way.
In Oklahoma, half of its women legislators aren’t running for re-election this year because they're term-limited out. That rate may seem high, but in a state that ranks 49th for the percentage of women currently serving in the state legislature, it doesn’t take a lot to get there.
“Our numbers to begin with are very low,” said Cindy Simon Rosenthal, director of Oklahoma University’s Carl Albert Congressional Research and Studies Center. “This is a major turnover of women in the legislature.”
In total, eight women are leaving -- seven because their terms are up and one because she is running for another office and would vacate her seat if successful.
When term limits were implemented in the early 1990s, the policy was billed, among other things, as a way to get more women elected to the legislature. The idea was that term limits would periodically force open races, where women candidates have historically fared better.
But in the early 2000s, it became clear that term limits were not the panacea for increasing women’s representation in politics. Since they were passed in Oklahoma and a number of other states in the 1990s, the level of female representation in state legislatures has stayed at roughly 25 percent.
Illinois May Target Predatory Lending to Small Businesses
College Savings Accounts Aren’t Just About the Money
Missouri's treasurer says 529 programs are only one piece of the college puzzle.
Every summer, staff at the nonprofit Scholarship Foundation of St. Louis spends the majority of their time in painful conversations with low-income families whose oldest child has been accepted to a college they can’t afford. The families bring their financial aid offers to these meetings with the hopes that the foundation will help them find a way to make it work.
But what they often learn, says Faith Sandler, the foundation’s executive director, is that paying back the loan would strain them to the breaking point. It’s crushing news. The Scholarship Foundation, she says, can’t “award to a needy student if that’s the kind of situation we’re contributing to. It’s a really difficult position for us to be in.”
That’s why the foundation jumped at a chance to partner with Missouri when it began offering matching grants in 2011 to lower-income families that start an account in MOST, the state's 529 college savings plan. The foundation set up and began contributing money to savings accounts for needy eighth graders. The idea wasn’t necessarily to significantly offset the cost of college for those kids, but was to set their families’ expectations and get them to start planning. “I think what we really want to do is to try and have smarter conversations earlier so we can avoid those horrible moments,” Sandler says.
The Week in Public Finance: Pension Buyouts, a New Way to Pay for Family Leave and More
A roundup of money (and other) news governments can use.
San Jose’s Never-Ending Pension Battle
A former San Jose, Calif., councilman who was instrumental in convincing voters to approve pension changes in that city four years ago is now filing papers in court to protect his legislation.
Pete Constant, who's now a senior fellow with the libertarian-leaning Reason Foundation, is challenging San Jose officials’ request pending before a judge to strike down Measure B. City officials are now in talks with unions to abandon it in favor of other changes they're negotiating that wouldn't require voter approval.
By doing so, Constant said in a press release Wednesday, the city will “abandon its obligation to defend Measure B and is poised to sell-out the voters.”
The Week in Public Finance: School Shutdowns, Trading Munis and Small Business Lending
A roundup of money (and other) news governments can use.
Education Opens Closes Doors
One of states' top spending items is education. When lawmakers can’t agree on a budget -- or they decide to make severe cuts -- higher education often gets hurt. Sometimes, even K-12 spending takes a hit. In Illinois and Pennsylvania, ongoing stalemates over the current fiscal year’s budget may lead to school closures. In Louisiana, potential major cuts have students protesting.
Let’s start in Illinois, where three state universities have taken severe hits. Last Friday, Chicago State University sent layoff notices to all 900 of its employees. The school is making plans to end its semester early unless the state makes good on funding promises. That alarming news came after Western Illinois University announced it would cut $20 million from its budget over the next two years, while laying off 100 employees. Southern Illinois University is contemplating $40 million in cuts and has already started closing programs, such as men’s tennis and women’s golf. Most recently, Eastern Illinois University, which saw its credit rating downgraded to junk status last month, laid off nearly 200 employees, although the school president offered assurances that the university was not closing.