Muni sweeps: Important deals for CA and NJ
New Jersey municipal employees to pay more for benefits
The Wall Street Journal is reporting that New Jersey Governor Chris Christie and the state Democratic leadership have reached agreement on reducing employee benefits:
In the face of heavy opposition from unions, the Democratic leadership of the New Jersey legislature and Gov. Chris Christie reached an agreement on major cuts to public-worker pensions and benefits…
…Democrats worked into Wednesday evening to get union support, offering weaker proposals, to no avail, a person familiar with the negotiations said. Instead, top lawmakers went ahead with a comprehensive bill submitted earlier this week that requires workers to pay more toward their pensions and new hires to work longer to reach retirement age, while eliminating annual cost-of-living increases for current and future retirees, among a slew of other changes.
Under the bill, workers would be required to pay a percentage of the cost of their health-care premiums, based on what they make, rather than the current 1.5% of their paycheck.
This is a big step forward for New Jersey.
California gets a big deal done… sort of
From Jim Christie of Reuters:
California lawmakers used old tricks of delaying payments and rosy revenue forecasts to help nominally close a $10 billion budget gap and meet their budget deadline for the first time in years.
Democrats, who control both the state Senate and Assembly, took advantage of new rules to pass a budget package with a simple majority. They added some new revenue measures, including requiring Internet retailers like Amazon.com to collect sales tax, but stuck mostly to short-term measures.
Governor Jerry Brown did not say if he would sign the legislation, which critics said brimmed with the kind of “smoke and mirrors” he had promised to avoid.
It’s also uncertain how the Democrats’ budget may affect demands by Republicans for a spending cap and overhauls to the state’s pensions and regulations. Brown had hinted they could be part of a budget deal with him.
California Watch has more.
48 of 50 states enjoy economic growth
The Business Journal collects the latest numbers on gross state product:
North Dakota registered the sharpest increase in gross state product (GSP), an annual measure of the total output of goods and services. Its GSP soared 7.1 percent last year.
New York was next with an increase of 5.1 percent, pushing its gross state product slightly above $1 trillion for the year. New York joined California ($1.73 trillion) and Texas ($1.11 trillion) as the only states with trillion-dollar economies.
See the full table of state economic data here.
Bleak Medicaid future
Medicaid is financed jointly by the federal government and the states, with the federal government paying a larger share in poorer states like Mississippi and West Virginia and a smaller share in higher-income states like New York and Connecticut.
The [federal stimulus] aid ending next month increased the federal share of Medicaid spending in all states, with additional help for states where unemployment rates had risen sharply. The extra aid was scheduled to expire last December, but Congress extended it for six months at the urging of the White House and state officials.
The additional money pushed the average federal share of Medicaid spending nationwide to 67 percent. It will revert to 57 percent next month. The cutback in federal Medicaid money has put pressure on states to cut the budget for other programs, including education and social services…
…Kansas illustrates the predicament most states are facing. Federal Medicaid payments in Kansas are expected to decline by more than $250 million, or 13 percent, in the state’s new fiscal year, which starts July 1, Mr. Allison said. But the amount of state revenue spent on Medicaid is expected to increase by more than $300 million, or 39 percent.
Big round of muniland issuance coming
From Investment News:
Municipal debt CUSIP requests were up almost 30 percent in May with 1,222 orders, compared with 943 requests in April, the New York-based provider of new security identifiers said today in a statement.
“That’s the highest number of requests for municipal bonds since December,” when there were 1,404 such orders, Richard Peterson, director of Standard & Poor’s valuation and risk strategies group, said today in phone interview.
New York Times: States Want More in Pension Contributions
Bond Buyer: Martha Haines Is Calling It Quits
Government Technology: White House Honors Unsung Open Data App Developers
Wall Street Journal: IRS Panel Urges Better Clarity on ‘Conduit’ Munis
Investment News: Rare bond offering from top-rated state due this week
Cleveland Plain Dealer: Ohio budget conference committee gets good news on state revenues, bad news on Medicaid costs
San Mateo County Times: Grand jury dings San Mateo County Community College District over fitness center