A new study by the Pew Center on the States finds that the gap between the states' pension and retiree health benefit promises and the money they have to meet them climbed 26% in just one year, hitting $1.26 trillion in fiscal 2009.
Even that alarming figure relies on the states' optimistic assumptions about how much they expect to earn on their investments. Using more realistic assumptions could boost that gap to $2.4 trillion, Pew found.
Bad as it is, this funding gap is a piker compared with the federal government's debt. We're not talking about the $14 trillion in public debt that everyone has been focused on, but the even more massive debt we're piling up in Social Security, Medicare and other entitlements.
According to the Cato Institute's Michael Tanner, we've promised future retirees far more than we can pay at current tax rates. How much more? If these unfunded liabilities were included in our debt figures, it would reach $127 trillion — or more than 730% of gross domestic product. This debt tsunami isn't hitting us by surprise. Indeed, Tanner and others have issued countless warnings that we've been promising future retirees far more than we can deliver, only to be met with indifference or hostility.
5th state exempts guns. Is Washington noticing? By Bob Unruh March 15, 2010 'I think they're going to let it ride, hoping some judge throws out case'
South Dakota Gov. Mike Rounds has signed into law his state's version of a Firearms Freedom Act that first was launched in Montana. It already is law there, in Tennessee, Utah and Wyoming, which took the unusual step of specifying criminal penalties – including both fines and jail time – for federal agents attempting to enforce a federal law on a "personal firearm" in the Cowboy State.
Study: States Must Fill $1 Trillion Pension Gap at Fox News February 18, 2010 States may be forced to reduce benefits, raise taxes or slash government services to address a $1 trillion funding shortfall in public sector retirement benefits, a new study warns. ...
HARRISBURG, Pa. -- States may be forced to reduce benefits, raise taxes or slash government services to address a $1 trillion funding shortfall in public sector retirement benefits, according to a new study that warns of even more debilitating costs if immediate action isn't taken.
The Pew Center on the States released a survey Thursday of state-administered pension plans, retiree health care and other post-employment benefits in all 50 states that blamed a decade's worth of policy decisions for leaving them shortchanged.
The result for some states will be "high annual costs that come with significant unfunded liabilities, lower bond ratings, less money available for services, higher taxes and the specter of worsening problems in the future," the study said.
The cost of the trillion-dollar shortfall, which will be paid over the coming decades, is about $8,800 for each American household. The study did not include many city, county and municipal pension plans, which are thought to have similar underfunding.
"We have a significant problem now, but it's a problem that can be solved by taking relatively modest steps," said Susan K. Urahn, the center's managing director. "If they don't do anything, if they wait, eventually they will have an unmanageable crisis on their hands."
As of 2008, states had $2.4 trillion to meet $3.4 trillion in promised pension, health care and other post-retirement benefits, according to the report.
UNIONS AND RED INK Forbes.com has developed some information that you might find interesting. First of all, here's a list of the five states that are in the worst financial shape:
... and the list of the five states in the best condition financially:
Now ... let's look at the politics. The five states in the worst financial condition are solidly Democrat. They are the bluest of the blue. Of the three states in the best financial condition, three are solidly Republican; Utah, Nebraska and Texas. The other two lean Democrat, but only slightly.
Freedom in the 50 States: Index of Personal and Economic Freedom by William P. Ruger and Jason Sorens This study improves on prior attempts to score economic freedom for American states in three primary ways:
it includes measures of social and personal freedoms such as peaceable citizens’ rights to educate their own children, own and carry firearms, and be free from unreasonable search and seizure
it includes far more variables, even on economic policies alone, than prior studies, and there are no missing data on any variable
we adopt new, more accurate measurements of key variables, particularly state fiscal policies.
We find that the freest states in the country are New Hampshire, Colorado, and South Dakota, which together achieve a virtual tie for first place. All three states feature low taxes and government spending and middling levels of regulation and paternalism. New York is the least free by a considerable margin, followed by New Jersey, Rhode Island, California and Maryland. On personal freedom alone, Alaska is the clear winner, while Maryland brings up the rear. As for freedom in the different regions of the country, the Mountain and West North Central regions are the freest overall while the Middle Atlantic lags far behind on both economic and personal freedom. Regression analysis demonstrates that states enjoying more economic and personal freedom tend to attract substantially higher rates of internal net migration.
The data used to create the rankings are publicly available online at www.statepolicyindex.com, and we invite others to adopt their own weights to see how the overall state freedom rankings change.
