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Did the states fully fund prior long-term commitments made for public worker pensions and health care, as well as for education, transportation, and other areas?

Asked by: jakscrow
Did the states fully fund prior long-term commitments made for public worker pensions and health care, as well as for education, transportation, and other areas?
  • No responses have been submitted.
  • Too general of a question.

    There is no one monolithic entity of "the states," here. On an individual basis, yes, of course some states have not provided for what they have promised, and/or have raided the funds, to use the money for other purposes. Kentucky is a perfect example of this - foolish and heinous action on the part of governors and state legislatures, to the extreme.

  • Pensions are unfunded by poor public policies.

    No, most pension plans call for 7-9% returns. And the closer the pension returns are to actual returns then the funds arent fully funded. US Treasuries, which account for many pension funds 50% base, has hovered around 2-3% since 2007. How can the financial predictions have such disparity between actual bond rates vs estimated pension fund rates? Everyone involved, politicians, pensioners, pension fund managers, are living in financial fantasy land. Short term band-aids and save my job extensions need to be replaced with smart budgeting decisions. There should also be a universal standard per state. Citizens as well as pensioners need to be more involved in pension decisions while migrating to a defined contribution plan.

    Support data
    -In 49 states, “balanced budgets” are required by constitution or by statute; Vermont,
    the sole exception, follows the practice of its peers. In truth, however, there is no common
    definition of a balanced budget, and many states resort to short-term sleight of hand to
    make it appear that spending does not exceed revenue. The techniques include shifting the
    timing of receipts and expenditures across fiscal years; borrowing long term to fund current
    expenditures; employing nonrecurring revenue sources to cover recurring costs; and delaying
    funding of public worker pension obligations and other postemployment benefits (OPEB),
    principally retiree health care. (truth and integrity)
    -Overall funding rates were the worst in Illinois (with just 39% funded) and Kentucky (44%), where pension funding levels have declined for three years in a row. Just two states managed to finish the year with 100%-funded pensions: South Dakota and Wisconsin. (yahoo)
    -There are a number of ways for states to retire their pension debt more effectively, the report notes. Those include shorter amortization periods; steady, level interest payments instead of deferring larger payments until later; and using defined payment schedules rather than refinancing the debt every year. (yahoo)

    http://finance.Yahoo.Com/news/illinois-not-alone-states-facing-103900993.Html
    https://volckeralliance.Org/sites/default/files/attachments/Truth%20and%20Integrity%20in%20State%20Budgeting%20-%20Lessons%20from%20Three%20States%20-%20The%20Volcker%20Alliance.Pdf


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