State Budgets

The Williams Report, August 2018


Illinois: State Admits to Billion-Dollar Budget Hole

The Rauner Administration acknowledged a $1.2 billion structural deficit in an offer to sell $920 million in state bonds. This deficit is a result of the previous deficit bonding, outmigration and lack of pension reform.

Maryland: Baltimore Looking to Tax and Regulate Airbnb

Airbnb operators may soon face new taxes and regulations in Baltimore. Many have offered to “pay the tax” in exchange for avoiding potential new licensing and inspection requirements.

Montana: State Supreme Court Sends Tobacco Tax Initiative to Ballot

Montana Chief Justice approves ballot initiative on discriminatory tobacco taxes, despite language petitioners claimed was prejudicial and confusing to voters.

North Dakota: Legislator Introduces Bill to Empower the State to Keep Wind Energy Tax Revenue

Revenue from wind energy taxes currently accrue entirely to local governments, but the bill would empower the state to retain some revenues in line with existing policies on coal and oil revenue.

Oregon: Measure 104 Extends Super-Majority Requirements to Repealing Tax Expenditures

Measure 104 is a ballot initiative that extends the restrictions on raising new revenue to the proposed repeal of tax expenditures, namely Oregon’s Mortgage Interest Deduction

Rhode Island: State to Face $158 Million Budget Deficit Next Year

In a letter sent to state agencies last week, state budget officer Tom Mullaney said the state is facing a deficit of $158 million in its 2019-20 budget year – largely a result of continued irresponsible spending.

Virginia: Governor Northam Plans to use $555 Million Surplus to Expand the Earned-Income Tax Credit

By expanding the EITC, many low and middle-income earners could go from simply recouping some of their own money through a refund to earning a net profit from filing taxes.

Washington: Localities Demand more Funding as they Negotiate Salaries with Public Teachers Unions

Localities are bargaining public teacher’s salaries with funding they don’t have, and expect the state to pay the difference.

Wyoming: Oil and Gas Price Volatility is Causing Trouble for Local Budgets

Large crests and troughs in the price for oil and gas is swinging local government revenues from surplus to funding crisis to temporary relief as prices swing back up.



California: CalPERS To Pay $3.4 Million to Dow Jones for Copyright Infringement

After reproducing full-text articles from major publications such as the New York Times and The Wall Street Journal, CalPERS is now on the hook for millions in fines – a startling abuse of taxpayer and beneficiary dollars.

California: Fire Union Leaders Engage in Pension Spiking

Two California firefighter union leaders are seeking to expand their public pensions because they never took a day off work. By using overtime in calculating pension benefits, some employees are able to collect benefits in massive excess of what they paid into the system, forcing taxpayers and younger workers to pay the difference.

Connecticut: With Pressure Off, Hartford City Council Backtracks on Pension Reform

Now that the state has agreed to pay off a half-billion dollars of debt the city ran up, Hartford’s city council has decided to kick the can down the road on tackling the reforms necessary to prevent another near or, more likely, actual bankruptcy.

D.C.: Metro Assents to $85 million in Wage Increase, but Keeps Unaffordable Pension Status Quo

After arbitration, Metro management agreed to pay increases on 1.6 percent over four years but failed to address nearly $3 billion in unfunded retirement liability.

Illinois: Chicago Has More Retired Police and Firefighters Than Those Working – Underfunded Pension Will Be Harder to Fix

The City of Chicago has the same upside-down relationship between active and retired public safety workers as New York City. With fewer people pulling the cart than riding it, fewer dollars will be flowing into the pension than those being paid to beneficiaries, making needed reforms even harder for managers to stomach.

Kentucky: Pension Reform Still Mired by Mudslinging and Regrettable Political Responses

Governor Bevin, lawmakers, and unions must come together for meaningful conversations and set aside partisan talking points should they desire any reforms to the pension system.

Montana: Gov. Bullock’s Budget Director to Head Montana Board of Investments

Budget Director Dan Villa has been tapped to head the state pension investment authority.

New Jersey: Panel Calls for Overhauling Pensions, Schools, and More

A Bipartisan Legislative Commission recommends scaling back public-employee benefits in the face of mounting unfunded liabilities.

New York: New York City Has More Retired Cops Collecting Pensions Than Active Cops on the Streets – City Now Spends More on Pensions than Operating Budgets

With fewer employees contributing to the pension fund, NYC’s police retirement system has become unsustainable.

Oregon: There is No Magic Bullet for PERS

A 15.4 percent return is more than double what PERS expected, but still isn’t enough to dig out the system from the effects of years of mismanagement. Volatile returns, overgenerous benefits, and repeated failure to make adequate annual required contributions continues to drive up the system’s unfunded liabilities.

Puerto Rico: Pension Bondholders’ Claims Ruled Unenforceable

Bondholders in debt issued by Puerto Rico’s Employees Retirement System were denied a bid to claim collateral property.

Texas: City of Fort Worth Moves Toward Compromise on Pension Shortfall

To avoid a situation like neighboring Dallas, Fort Worth city leaders announce they are pursuing several unnamed avenues to resolve their $1.6 billion shortfall.


In Depth: State Budgets

Smart budgeting is vital to a state’s financial health. The ALEC State Budget Reform Toolkit offers more than 20 policy ideas for addressing today’s shortfalls in a forthright manner, without resorting to budget gimmicks or damaging tax increases. One way to stabilize budgets over time is to embrace…

+ State Budgets In Depth