Wednesday, June 01, 2016

California's Fiscal Condition

Where do you think California ranks?
A new study for the Mercatus Center at George Mason University ranks each US state’s financial health based on short- and long-term debt and other key fiscal obligations, such as unfunded pen­sions and healthcare benefits. This 2016 edition updates the version the Mercatus Center pub­lished in 2015. Using the approach pioneered in 2015, the 2016 edition presents information from each state’s audited financial report in an easily accessible format, this time including Puerto Rico to provide a benchmark of poor fiscal performance.

Growing long-term obligations for pensions and healthcare benefits continue to strain the finances of state governments, highlighting the fact that state policymakers must be vigilant to consider both the short-term and the long-term consequences of their decisions. Understanding how each state is performing in regard to a variety of fiscal indicators can help policymakers as they consider the consequences of policy decisions.
Out of the 50 states, California ranks #44.
Updating the fiscal condition of the states with another year of data shows that most states’ fiscal performance remains relatively constant, but the signs of fiscal stress persist. Underfunded pen­sions and healthcare benefits continue to put pressure on state finances. Even states that appear to be fis­cally robust—perhaps owing to large amounts of cash on hand or revenue streams from natu­ral resources—must take stock of their long-term fiscal health before making future public policy deci­sions. These fiscal pressures point to areas for policymakers to direct their efforts. They also highlight areas where improved financial reporting could give the public a clearer picture of states’ fiscal health.
I know what let's do.   Let's get our public employee/teacher pensions to divest from oil, tobacco, firearms, Israel--am I missing any?--because God knows we'll do anything fiscally stupid in this state.

BTW, do you notice anything in common about the top 10 states on that list?  Do you notice anything in common about the bottom 10 states on that list, and throw in Puerto Rico for good measure?  Hint:  10 out of the top 10 have something in common (think: color on an electoral map), and 9 of the bottom 10 or 11 have something in common (think: color on an electoral map).  Just sayin'.


BB-Idaho said...

We presume that the public sector (84% with pension benefits) may begin trending after the private sector (4% with pension benefits.)
I was lucky enough to retire on pension in 2003 and lucky enough to
work for a company that offered a 50% addition up to 8 % on 401K
plan. IMO its a big problem for all concerned, given the extended
lifespan, the dangers of inflation, periodic market plunges and
rising healthcare costs. Hopefully you math guys can figure it all out.

Darren said...

We math guys *have* figured it all out--but California's government is quite immune to logic. At least a token change was made last year, and teachers, districts, and the state will all kick in a little more to the teachers' retirement system in order to pay for the promised benefits. Did you get that? I'm now paying more just to receive the benefits I've already been promised. Which means those benefits weren't feasible when they were promised. Immune to logic.

Auntie Ann said...

I always remind people that you get the government you want and deserve. Californians keep voting for this crap. Californians and Los Angelenos keep voting for people more interested in throwing money around than running the state and city. Sure, a lot of people are blissfully unaware of the high-speed train of disaster racing towards us, but plenty do understand...of course, those who do are usually looking for ways to leave and telling their kids to get the %$#@ out of California ASAP.