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  #391  
Old 05-24-2017, 05:57 PM
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RAMAPO, NEW JERSEY
FRAUD

https://www.bondbuyer.com/opinion/bo...nue-generation

Quote:
Bond fraud trial shows need to scrutinize municipal revenue generation

Ramapo, N.Y., Town Supervisor Christopher St. Lawrence is in the middle of a multi-week trial on two dozen securities fraud charges stemming from municipal bond issuances and accounting practices in Ramapo, a Rockland County hamlet. The star witness against St. Lawrence is former town attorney and leader of the town-owned Ramapo Local Development Corporation (RLDC), N. Aaron Troodler, who pled guilty to securities fraud charges in March. Though the trial has yet to conclude and Mr. St. Lawrence may yet be acquitted, the focus on bond issuances in the St. Lawrence trial shows the federal government’s continued interest in policing securities fraud in the public sector. It also highlights the importance of outside scrutiny of municipalities’ revenue generation (and other indicators of fiscal health) early and often in the life cycle of a bond issuance.

With the St. Lawrence case as a backdrop, public sector securities issuers should consider developing more fulsome oversight efforts as to accounting and bond issuance and repayment documentation, including making sure outside counsel and, where appropriate, auditors, have an opportunity to probe major transactions and relevant ledgers. Given the massive size of the municipal bond market (almost $4 trillion), the St. Lawrence case is not likely to be the last example of criminal securities charges flowing from municipal bond accounting issues.
I don't think "fulsome" is the apt word here. How about "thorough"?

Quote:
.....
The Ramapo financial saga began when the town built a $60 million baseball stadium, and issued approximately $30 million in bonds to pay towards the construction cost. The town’s general fund could not support the required principal and interest payments, and St. Lawrence allegedly lied about revenue sources and the fund balance by propping it up with money from other town funds and with fake receivables to keep the general fund (falsely) in the black. The allegedly fraudulent receivables accounting make the bonds look much more solid than they are. Troodler, who pleaded guilty, borrowed money to make scheduled payments instead of financing the payments via the town’s reserve cash. The government has put on evidence at trial that the fake receivables totaled nearly $10 million over approximately five years. Both investors and bond raters received the allegedly false information and made bond investment decisions on that basis.

The government has called numerous other town employees as witnesses who have testified to a culture of secrecy around the general fund balance. One witness testified that the fund balance was only shown to town officials, and that St. Lawrence was maniacal about controlling information regarding town finances and sought to be the ‘go-to guy’ on town finance. There are allegations of accounting issues as well false information flow; St. Lawrence allegedly made numerous improper transfers across town accounts and orchestrated a buy-back of property to make the town coffers look more full than they really were. This type of individual-level decision-making can lead to obviously problematic practices; public entities should view the St. Lawrence case as an opportunity to implement internal controls that avoid bottlenecking financial information with a single official.

The St. Lawrence trial may also be novel to the extent it reveals prosecutorial willingness to pursue criminal charges where there has been no private financial gain to the individuals themselves. Public sector employees can be just as vulnerable to criminal liability as more conventional white collar defendants have long been in the private sector. Municipal revenue generation efforts can be a risky area, and city governments should be sure to scrutinize—and invite outside scrutiny of—bond issuance and accounting practices as they work to generate funds for key projects.

Small towns and struggling municipalities are particularly vulnerable to accounting issues and frauds like the ones we are seeing in the St. Lawrence trial, and making sure disinterested parties are engaged early on can help avoid a mountain of problems later. As cities look to obtain financing for new projects, it is also critical to continue managing and scrutinizing the accounting throughout the entirety of a bond term. Where bond accounting touches other city funds and ledgers, city employees should take extra care to take into account the whole ecosystem of municipal ledgers. Engaging auditors and outside counsel up front can help protect the revenue generation for the life of a bond. Ensuring that these disinterested parties have an eye on internal controls and on the revenue generation accounting is one key to avoiding some of Ramapo’s problems and help maintain municipal financial health in both the short and long term.
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  #392  
Old 05-24-2017, 06:03 PM
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http://www.truthinaccounting.org/new...er-too#new_tab

Quote:
Government financial disclosure: words matter too
May 22, 2017

A new research article in the Journal of Financial Economics examines the ‘readability’ of shareholder reports, and concludes that firms can increase their market value by improving their readability.
The authors (Byoung-Hyoun Hwang and Hugh Hoikwang Kim) analyze reports using 8 factors identified in the SEC’s 1998 Plain English Handbook as detrimental to readability.

Those factors include

Passive voice
Weak / hidden verbs
Superfluous verbs
Legal and financial jargon
Numerous defined terms
Abstract words
Unnecessary details
Long sentences

Summarizing their findings, Hwang and Kim underline how “corporate disclosure comes in the form of accounting numbers framed or accompanied by a substantial amount of text.” In the text of the paper itself, the authors observe:

“… annual reports with high readability scores (as per our measure) are associated with more positive moods than annual reports with low readability scores. We also find hints in the data that higher readability generates more trust and higher perceived managerial skill. …”

While governments are not publicly traded, citizens may usefully examine the quality of their disclosure along these lines.

Do governments in weak financial condition exhibit unclear writing in their annual financial reports, compared to governments in relatively good condition?

This morning I looked at the letters of transmittal in the latest annual financial reports for the states of Illinois and Indiana. I counted the number of words, the number of sentences, the number of commas, and the frequency of passive verbs.

Illinois has dug a significantly worse financial hole for itself than Indiana. Coincidentally, or not, the latest letter of transmittal for Illinois shows a higher passive verb frequency and a higher comma/sentence ratio than for Indiana.
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  #393  
Old 05-26-2017, 03:21 PM
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HARTFORD, CONNECTICUT

http://www.foxnews.com/us/2017/05/22...y.html#new_tab

Quote:
Hartford latest U.S. city on the brink of bankruptcy
Hartford is the latest American city to be on the verge of bankruptcy.

Leaders in the Connecticut capital have been soliciting proposals from law firms that specialize in Chapter 9 bankruptcy in anticipation of being strapped for cash in the city’s budget, according to the Hartford Courant.

The city is facing a deficit of $65 million in 2018, which is on top of a $14 million shortfall this year, the paper said. Hartford City Hall is now reportedly seeking $40 million in state aid to close the gap.

Mayor Luke Bronin has hinted for months that filing for Chapter 9 could be a possibility and said during his budget release in April that he was “not in a position to rule anything out,” according to the Courant.

Some in the City Council apparently feel that inquiries with law firms on possible bankruptcy proceedings may not be the right approach.

"It's premature,” Hartford City Council President Thomas “TJ” Clarke II told the newspaper. “We haven't exhausted every option and every avenue for us to go down this road."
.....
Hartford has faced similar problems in recent years as more than half of the city’s properties are tax-exempt and options for other sources of revenue being limited. Also, the city already has some of the highest property tax rates in the state which makes raising them to cover budget gaps out of the question.



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  #394  
Old 05-30-2017, 05:13 PM
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CONNECTICUT

http://www.realclearpolicy.com/artic...er_110255.html

Quote:
The Moral Case for Letting Connecticut Go Under

Amidst growing concern over the shaky financial conditions of California, Illinois, and New Jersey, my home state of Connecticut is often overlooked. Its size and population are relatively small, and its position between Manhattan and Boston make the state appear unimportant. Moreover, with some of the nation’s wealthiest communities — Darien, New Canaan, and Greenwich — how bad could things really be?

Very bad, according to a 2016 study for the Mercatus Center at George Mason University. The study calculated the fiscal health of each state according to its short- and long-term debt, unfunded pensions, and other key fiscal obligations. Connecticut came in the sickest of all.

Over the last month, all three of Wall Street’s big credit rating agencies have further downgraded the state’s debt, with Fitch and Moody’s ranking Connecticut’s fiscal soundness as the third worst in the country. S&P was only a little more generous, naming the state fourth worst behind Kentucky.

But that’s not all. Tax receipts in Connecticut over the next two years are expected drop 12–14 percent below what was originally budgeted. Last summer Superior Court Judge Thomas Moukawsher declared that the state’s public school system must be completely revamped to benefit urban and learning disabled students. And the state legislature remains reluctant to raise already high income and corporate taxes in the wake of General Electric’s protest move to Massachusetts. Add that all up and Connecticut is arguably the most financially distressed state in America.
.....
About the only policy lawmakers do seem to agree on is that the Nutmeg State should not be allowed to go bankrupt. More accurately, they all agree that nothing should be done to frighten bondholders so much that a bankruptcy option, which is not addressed in current federal law, would have to be invented (as it was last year for Puerto Rico).

It’s easy to see why politicians from both parties would want to avoid the kind of financial black eye that would make it harder to borrow money in the future. Yet, from a national perspective, if you had to let one state go as a warning to the other 49 to finally get their own financial houses in order, Connecticut would be the ideal choice.

.....
As for Connecticut’s most distressed cities, Hartford and Bridgeport, the finances of the former are so bad that its bankruptcy is a virtual certainty, regardless of the fate of the state’s finances overall. In early May, Mayor Luke Bronin confirmed that Hartford has already solicited proposals from law firms specializing in Chapter 9 protection for municipalities. Similarly, Bridgeport, which was barely prevented from declaring insolvency in 1991 by a state review board, would gain little from keeping the legislature’s budget on life support. If anything, Connecticut’s bankruptcy would begin to correct problems that for decades have prevented its older industrial cities from spontaneously regenerating: heavy spending on health insurance for retired city workers (almost completely phased out of the state’s private companies); antiquated binding arbitration laws; and a general lack of fiscal discipline.

When one thinks of the two constituencies that would be most harmed by a state bankruptcy — its bondholders and its public employee unions — there is a certain justice to letting Connecticut be the chastened example for the rest of the country.

In theory, municipal bondholders play a crucial role in promoting the fiscal health of states and municipalities by adjusting the interest rates they demand for lending their money. But for decades, affluent investors across the U.S. have largely ignored mounting civil debt, underfunded pensions liabilities, and other telltale signs of local government distress on the assumption that Washington would, if necessary, bail them out.

.....
As for Connecticut’s public employee unions, their campaign contributions have so corrupted state legislation that towns are almost helpless to control worker salaries and benefits. There is, in fact, a statute — the “minimum budget requirement” — which prohibits most school districts from reducing their spending whenever the student census drops.

.....
Dr. Andrews was executive director of the Yankee Institute for Public Policy from 1999 to 2009. He is the author of To Thine Own Self Be True: the Relationship between Spiritual Values and Emotional Health (Doubleday).



http://www.foxnews.com/us/2017/05/26...scal-mire.html

Quote:
Connecticut, home to great wealth, may be sinking into a fiscal mire

Home to Yale University with its $25-billion endowment, numerous high-flying hedge funds and top-drawer celebrities ensconced in opulent estates worth tens of millions of dollars, Connecticut possesses great wealth and boasts the highest per capita income of any American state.

But look a little closer and it’s a fiscal train wreck. The Constitution State is among the worst states when it comes to business costs, economic climate, growth prospects and regulatory burdens. Ground zero for this train wreck is the capital, Hartford.

.....
Its budget woes, as well as concerns that they will be repeated year after year, helped lead General Electric in 2015 to consider moving its headquarters out of the state. Last year, it did exactly that.

The state’s population is falling: Its net domestic out-migration was nearly 30,000 from 2015 to 2016. In 2016, it lost slightly more than 8,000 people, leaving its population at 3.6 million. Indeed, recent national moving company surveys underscore the trend, showing more people leaving Connecticut than moving in. In 2016, the state also saw a population decline for the third consecutive year, according to Census Bureau estimates.

One of the companies, United Van Lines, reported that of all their Connecticut customers, 60 percent were leaving compared to 40 percent who were moving there. Only three other states had higher rates of people moving out – New York, New Jersey and Illinois. One out of five of those leaving said they were retiring.

......
Some of the state’s most prominent economic experts blame present and past political leaders for the crisis, saying that they were lulled by Connecticut’s wealth and felt no urgency to revamp the financial system and try to bring expenses and revenue into alignment. They say political leaders have been short-sighted, lurching from crisis to crisis in recent years and have been reluctant to consider new ways of handling Connecticut’s finances and to diversify its economy.

.....
As a partial solution, Malloy and state employee union leaders agreed earlier this week on a tentative proposal calling for concessions by the worker groups of about $700 million for the next fiscal year, and slightly more than $800 million for 2018-2019.

The plan, which faces a vote by member unions, would freeze wages for the next two years, but then give raises of a base of 3.5 percent the following two years.

The concessions, which Malloy had pushed for, were controversial among union groups.

The Services Employees International Union’s Local 1199, which represents 7,000 state workers, has taken a very vocal stance against the governor’s proposed cuts and employee layoffs. The union has denounced the governor’s proposal for cuts as heartless, and says it will hurt those who already struggle and are the state’s most vulnerable, including children and the disabled.
.....
“You have a lot of wealthy people in the state. Democrats and Republicans have proposed concessions from state workers. It comes out to about $30,000 per person. That’s salary combined with health insurance and other benefits. It’s an astounding amount for just middle-class workers to be handling. Everyone should be part of the solution, not just the middle class.”


.....
Already the state’s richest residents pay a huge portion of state revenue: The top 1 percent of the wealthiest residents, McClure said, already account for about 30 percent of state tax revenue.
.....
Malloy has said it behooves the legislature to work with him to address the economic crisis. The state Senate is evenly split between Democrats and Republicans, each with 18 members. In the House, Democrats hold a 79-71 majority.
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  #395  
Old 06-02-2017, 05:16 PM
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REVENUE FROM THE FEDS

http://www.governing.com/topics/fina...m_medium=email

Quote:
How Much Do States Rely on Federal Funding?
There's a wide range of dependence across and within the states. Here's a state-by-state look at how welfare, education and roads could be impacted by the next budget that Trump signs.

As Congress debates the budget, states are eagerly waiting to hear how it will affect them.


Updated data from the Census Bureau's 2015 Annual Survey of State Government Finances published last week indicates that federal aid made up nearly a third of all states’ general fund revenues in fiscal year 2015. The single largest line items in states’ budgets include federal funding for transportation, Medicaid and other social assistance programs.

The survey, which provides a detailed portrait of how states generate and spend money, suggests states' reliance on federal money varies greatly. Even larger discrepancies exist across individual areas of state government.

We've compiled data below showing how much of each state's budget is tied to federal aid across select major spending areas.



State Budgets Most Reliant on Federal Funding Overall

Neighboring Louisiana and Mississippi are generally among the top recipients in federal aid year after year. That was true again in 2015: Federal intergovernmental revenues accounted for about 42 percent of their general fund revenues, the top shares nationally.

Other states whose budgets are most dependent on the feds include Arizona (40 percent), Kentucky (40 percent), New Mexico (39 percent), Montana (39 percent) and Oregon (39 percent). That’s roughly twice as much as the least-reliant state budgets, which include North Dakota (18 percent) and Virginia (22 percent).
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  #396  
Old 06-02-2017, 05:33 PM
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SCRANTON, PENNSYLVANIA

http://www.governing.com/topics/fina...m_medium=email

Quote:
n Scranton, Pa., Fiscal Progress Comes With Political Costs
The city is on the brink of making a speedy turnaround. Many worry that the tough financial decisions it took to get there could reverse some of its political progress.

After a quarter-century of being branded by the state as "fiscally distressed," Scranton, Pa., is the closest it's ever been to shedding that label. If its finances remain stable, the city is expected to exit the state’s Act 47 distressed cities program -- which it entered in 1992 -- in the next three years.

What makes the news remarkable is the tailspin that Scranton was in just a few short years ago. When Mayor Bill Courtright took office in 2014, he inherited a city that had balanced its budget for five straight years using onetime revenues and deficit financings. “In early 2014, everyone wrote us off,” says Courtright. “It was like we had a disease.”

But thanks to what observers are calling a new era of political cooperation between the mayor and council, Scranton has made considerable progress. City officials have approved several tax increases aimed at balancing the budget, including a hike in property taxes and garbage fees. Those, combined with a new commuter tax, have injected $16.2 million in new annual revenue into the $90 million general fund.

....
Facing a new state law in 2014 that would have placed the city in receivership if it didn’t make progress, Scranton conquered several key financial demons in recent years.

For starters, the city reached a settlement with police and fire unions over a multimillion-dollar back pay lawsuit first filed more than a decade ago. The Pennsylvania Supreme Court sided with the unions in 2011, but the city couldn’t afford to pay the initial $24 million settlement and instead let the award collect interest.

Last year, Courtright announced the city had agreed to pay the unions most of what it owed -- now $30 million -- in exchange for reforms to the city’s troubled public safety pension. The biggest concessions were that workers would increase their pension contributions over time and that the pension funds would be managed by a third-party professional administrator. The administrative transfer also included more stringent guidelines for determining whether an employee is eligible for a disability pension.

.....
“They used to be insane,” Cross adds of those council meetings in which tensions between elected officials and the public got so high that metal detectors were installed at one council meeting in 2007. “But it’s hard to argue now with balanced budgets and progress downtown. The budget is stable, now we have to strive for sustainability -- and that’s all very boring.”
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Old 06-07-2017, 07:23 AM
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HARTFORD, CONNECTICUT

https://www.wsj.com/articles/hartfor...50405?mod=e2tw

Quote:
Hartford’s Finances Spotlight Property-Tax Quandary
Despite top property-tax rate in Connecticut, the state’s capital teeters on bankruptcy
Before quoting the news item, it's funny how often "Despite" should be changed to "Because of" or "Connected to "

Quote:
Hartford, Connecticut’s capital city and hub of the state’s insurance industry, is edging closer to joining a small club of American municipalities: those that have sought bankruptcy protection.

The city’s​ ​$49.6 million budget hole and the impending departure of one of its biggest employers, Aetna Inc., ​have shined a light on its unusual predicament: Half of the city’s properties are excluded from paying taxes because they are government entities, hospitals and universities.

It has less taxable property than the neighboring suburban community of West Hartford, which has less than half of the population than its urban neighbor. And Hartford’s total property-tax receipts are about 25% below that of the tony community of Greenwich.

“The root of the problem is you have a city built on a tax base of a suburb,” said Mayor Luke Bronin.
The mayor said the small tax base along with growing fixed costs produced structural budget deficits that prior administrations sought to deal with through asset sales, short-term debt restructuring and property-tax increases.

Mr. Bronin is now asking for financial help from the state. “My goal and my hope is that legislators from around the state of Connecticut will recognize that Hartford cannot responsibly solve a crisis of this magnitude at the local level alone,” he said.
......
For capital cities such as Hartford, much of the real estate is held by government departments that don’t pay taxes. Hartford, with a population of about 125,000, is home to the University of Connecticut School of Law, Trinity College, Hartford Seminary and the state Supreme Court.


Other cities in similar situations include Boston, where just over half of the property in the city is tax exempt. In Baltimore, about 32% of the property is tax exempt, and in Philadelphia it’s 27%.

.....
Only 64 bankruptcies have been filed by cities, counties, towns and villages since 1954, according to James Spiotto, an attorney who tracks municipalities’ bankruptcies. In 2013, Detroit became the largest-ever U.S. municipal bankruptcy case.

Victor Medeiros, a public-finance ratings analyst with S&P Global Ratings, which downgraded Hartford last month, said the city could face additional downgrades of several notches.

The credit-ratings firm will be watching whether Connecticut can reach a timely budget agreement and what level of financial assistance the state will be able to offer the city, he said.

Aetna and the other four biggest taxpayers in the city contribute nearly one-fifth of the city’s $280 million of property-tax revenue. Property-tax receipts make up nearly half of the city’s general-fund revenues.

Aetna, Hartford Financial Services Group Inc. and Travelers Cos. Inc., also Hartford’s biggest employers, have said they would collectively give the city a voluntary payout of $10 million annually over the next five years to help avoid bankruptcy. But the companies have said they want to see comprehensive changes that allows the city to stabilize its finances.

.....
Since 2000, Hartford has increased its property-tax, or millage, rate seven times. The rate is now more than 50% higher than it was in 1998.

At the current level, a Hartford resident who owns a home with an assessed value of $300,000 currently pays an annual tax bill of $22,287, at rate of 7.43%. A West Hartford homeowner with a similar house pays $11,853 at a rate of 3.95%.

The city must pay nearly $180 million on debt service, health care, pensions and other fixed costs in the coming fiscal year beginning July 1. That is more than half of the city’s budget, excluding education.

Mr. Bronin said one-time budget fixes and tax increases won’t cut it anymore. After cutting 15% of the city’s nonuniformed workforce, he said he won’t reduce the number of police officers or firefighters and added that further trimming of city services would be irresponsible.

Democratic Gov. Dannel Malloy last week said Hartford and the state Legislature would have to accept more oversight of the city’s finances in exchange for state assistance. “I do not support additional moneys going to our challenged urban environments without a review process,” Mr. Malloy said.

Connecticut House Majority Leader Matt Ritter, a Hartford Democrat, said everyone in the capital understands that it is in the state’s best interest to make sure the city has a sustainable future.

Bankruptcy “doesn’t just affect Hartford,” Mr. Ritter said. “It would affect neighboring communities, it would affect the state, it would probably affect our credit ratings.”

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  #398  
Old 06-09-2017, 03:30 PM
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http://www.governing.com/week-in-fin...rack-debt.html

Quote:
Studying up on Debt

While interest rates have been at record lows, governments have been more hesitant than ever to borrow. Why? The consensus is that the hard years of the recession and today’s constrained revenue growth have spooked many officials from increasing debt loads.

But a new study finds that only about half of the states (27) even seriously evaluate whether they can afford the debt they have and whether they have the leeway to take on more. Of those states, according to the Pew Charitable Trusts, nine "lead the way" in evaluating their debt loads: Florida, Georgia, Maryland, Massachusetts, New Hampshire, North Carolina, Oregon, Texas and Virginia.

The group of states that conduct debt affordability studies include highly leveraged states such as California and Connecticut, as well as states such as Georgia and New Hampshire, which have some of the lowest debt per capita.

Meanwhile, high-debt states such as Illinois, Michigan and New Jersey, do not produce a study.

The Takeaway: The research found that many states have trouble tracking all publicly supported debt. “Several state officials told Pew that only a handful of policymakers may know the full extent of the state’s debt,” the report says. “Challenges collecting and aggregating data, along with multiple layers of government, can pose obstacles. So can the temporary aspect of elected office, especially given the complicated nature of debt financing.”

Pew’s research shows that conducting affordability studies doesn’t automatically mean a government won’t over-leverage itself. But it at least means officials will know about it. It also means lawmakers will get help in striking the right balance between issuing bonds and paying for projects with cash financing.

To this end, Pew recommends creating studies that are mandated by statute, that put into context what the state has borrowed and its capacity to issue additional debt, and that estimate the state’s debt capacity over multiple years.

http://www.pewtrusts.org/en/research...ing-state-debt

Quote:

REPORT
Strategies for Managing State Debt
Affordability studies can help states decide how much to borrow
June 06, 2017 States' Fiscal Health

Overview
When a state government faces a large expense, such as adding lanes to a highway or restoring an aging bridge, officials often borrow the money, allowing these projects to move forward while spreading the costs out over time and to generations of taxpayers.

Gauging whether a state can afford to take on new debt, though—and how much—can be difficult. When lawmakers face decisions over whether to issue bonds or how to manage existing debt, they need the right data to inform their choices. In 27 states, officials produce debt affordability studies that evaluate the impact of potential issuances on the state’s self-imposed debt caps. These data-driven analyses give states the power to manage debt in a way that aligns with their resources and spending priorities.

As state budgets recover from the effects of the Great Recession of 2007-09, lawmakers are looking for ways to prepare for the next downturn. At the same time, states are increasingly interested in taking advantage of low interest rates to borrow money for key infrastructure projects that may have been put on hold during the recession.

To help lawmakers and state finance officials better understand and manage their state’s debt obligations, The Pew Charitable Trusts conducted a 50-state research study. Pew evaluated state financial documents published from January 2010 to October 2015, reviewed pertinent literature and websites, and interviewed officials, academic experts, and credit rating analysts. The result was the development of a set of criteria to define the characteristics of, and assess the quality of, a debt affordability study.

These key findings emerged from the research:

Twenty-seven states conduct debt affordability studies. Of these, nine—Florida, Georgia, Maryland, Massachusetts, New Hampshire, North Carolina, Oregon, Texas, and Virginia—lead the way by producing studies that give policymakers a clear understanding of their states’ debt levels through, among other things, careful projections, smart benchmarking comparisons, multiple descriptive metrics, and analysis.

Eighteen other states publish debt affordability studies that could be improved by adding elements such as a legal mandate to produce the study and an expanded scope of analysis. These states are Alaska, California, Connecticut, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Nevada, New Mexico, New York, North Dakota, Pennsylvania, Rhode Island, South Dakota, Vermont, Washington, and West Virginia.

Highly leveraged states are not alone in publishing debt affordability studies. North Carolina, Georgia, Nevada, and New Hampshire are among the states with the 10 lowest measures of debt per capita, according to Pew’s analysis of comprehensive annual financial report (CAFR) data, but all produce a study.

The states that produce debt affordability studies also vary in how they structure their debt. Some have highly centralized debt structures, while others delegate a higher share of total borrowing to independent agencies and authorities. Twenty-three states, including high-debt states such as Illinois, Michigan, and New Jersey, do not produce a debt affordability study. The amount of total debt held by states in this group differs greatly.
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Old 06-10-2017, 09:24 AM
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CONNECTICUT

http://www.nationalreview.com/articl...R5PM%20Actives

Quote:
Rust Belt Connecticut

t has become a familiar pattern in Connecticut over the last few years. Each spring, as the state’s budget dips back into the red, legislators gather in Hartford to prognosticate over the state’s fiscal viability. They fumble around for agencies to cut, for taxes to raise, for concessions from the public unions. Eventually they reach, with the help of Governor Dannel Malloy, some sort of stopgap deal, enough to paper over the wounds for the present fiscal year but woefully insufficient to address the roots of the longer-term problem. Connecticut is, in many ways, a state grappling constantly with the mistakes of past policy. The classic example of this pattern is the problem of unfunded pension liabilities. Among all the states in the union, Connecticut performs especially poorly in this regard: only 35.5 percent of its pension liabilities are funded. It’s tempting to pin the blame on current leadership, but that misses most of the story: The far more important factor is the rampant inability, or more likely unwillingness, of politicians over the last eight decades to fund the system adequately. The state has rarely, if ever, contributed the requisite amount to the system and indeed contributed nothing at all for the first 30 years of its existence. The same pattern crops up in a different domain as well, one not strictly fiscal in nature but rather economic, one that might not threaten the immediate fiscal viability of the state but that certainly will in the long term. This is the long trend of jobs and people exiting Connecticut for brighter, better-performing environs. The most recent iteration is the health insurer Aetna’s announcement that it has begun negotiations with various states, New York prominent among them, to move its headquarters from Hartford, where it has been since its founding in 1853. One can point as well to General Electric’s impending move from the leafy suburbs of Fairfield County to the Boston waterfront — the announcement of this early in 2016 sent shockwaves through Connecticut politics. Or one can point to the $220 million incentive package — poli-speak for “bribe” — the state offered Sikorsky, the famed helicopter manufacturer, in exchange for remaining in Stratford.

The typical critique goes like this: To dig itself out of its fiscal hole, Connecticut has raised taxes exorbitantly, making the price of doing business in the state untenable and creating one of the country’s worst business climates; companies such as GE and Aetna are escaping these constrictions and indeed are receiving healthy sums to do so ($145 million from Boston and the state of Massachusetts in GE’s case). But that angle of critique gets at only a small portion of the real issue. GE and Aetna are, after all, leaving for Massachusetts and New York, not uber-business-friendly Texas and Arizona. The real reason for leaving Connecticut is that the state has failed to prepare itself for the new, modern economy, and that to participate in the dynamism and innovation that marks certain sectors, companies must now look far afield from the suburbs of Hartford.

When Jeffrey Bornstein, the CFO of GE, was asked by the Wall Street Journal why his company had chosen to relocate, the answers he gave had little to do with relative levels of taxation or the promise of a favorable business climate elsewhere. Rather, he focused on social and cultural factors. In Connecticut, “there wasn’t a huge ecosystem around the company,” he said. “Attracting talent there was a bit of a challenge. For younger folks, [Fairfield is] maybe not the most dynamic place in the world.” Boston, meanwhile, features hundreds of thousands of students, multiple world-class universities, an “innate culture and tactical depth and talent.” Other cities offered more money, but only Boston could offer the “cultural fit and dynamism that [GE] saw in Boston.” Why confine yourself to the suburbs of Hartford and Fairfield County when the cosmopolitan metropolises of Boston and New York beckon?

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Though the suggestion might seem outlandish, it’s not entirely inconceivable that large swathes of Connecticut will, 20 or 30 years from now, look much like the Rust Belt does today. Certainly a set of factors points in that direction. The state has lost population for three years in a row, and the exodus is only accelerating; The story is not a fiscal one, as migrants from greater Hartford are moving to more, not less, expensive places. The ongoing collapse of the retail sector, as wonderfully elucidated by Kevin D. Williamson, will hit Connecticut especially hard: The state has the highest number of shopping malls per capita in the country. Meanwhile towns and cities across the state, rural and urban alike, are plagued by the opioid epidemic, which killed nearly a thousand Connecticut residents in 2016 alone. Connecticut in 2017 seems like a state on the verge of — or in the middle of — an inexorable decline. All of this is to say that prosperity is not permanent. Occupying a prime position in the economy of one era does not guarantee you that same position in the next. As the world evolves around you, you must either adapt or find yourself left behind. Connecticut has failed to perform the former and now faces the risk of the latter. In the face of this threat, the never-ending budget crisis in the halls of the capitol building can seem like something of a sideshow. There are far more pressing matters at hand.

Read more at: http://www.nationalreview.com/articl...R5PM%20Actives
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Old 06-12-2017, 06:58 PM
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DALLAS COUNTY SCHOOLS
TEXAS

http://www.nbcdfw.com/investigations...427540553.html

Quote:
Moody's Says 'High Probability' Dallas County Schools Will Be Shut Down


A report released Friday by the credit rating agency Moody's paints a dire picture of the future of Dallas County Schools.

"Dissolution is now a high probability," the report said. "While the terms of the dissolution would allow full or near full recovery for the General Obligation Limited Tax debt, dissolution would challenge the ability to repay the Promissory Notes and related unrated debt."

The report is the latest blow for the troubled school bus agency, which is millions of dollars in debt and is undergoing leadership changes.

Late last month the Texas Attorney General's Office denied DCS an opportunity to restructure its millions of dollars of debt.

The following day, the Texas legislature approved a measure that would let voters decide the agency's future. Last week DCS defaulted on millions of dollars of debt payments.

In response to the Moody's report, Leatha Mullens, interim superintendent of DCS, said "we are carefully examining all options. We are working hard to pay our obligations and do everything we can to protect the assets for taxpayers and employees while continuing services for school districts."
DCS is expected to receive approximately $2 million in state funding at the end of June and July respectively, but Moody's believes that will not be enough money to cover operating expenses and monthly debt payments.

.....
If DCS were to shutdown a large school district like Dallas ISD would be in a bind. There is no other agency large enough to handle the amount of Dallas ISD students who depend on the bus to get to school.
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