Comments on: Is muniland doping the data? Bridges, budgets, bonds Mon, 24 Nov 2014 00:29:08 +0000 hourly 1 By: Cate_Long Fri, 28 Mar 2014 12:49:17 +0000 Moodys:

New Jersey’s Reduced Pension Contribution Reflects Persistent Budget Pressure

On March 21, New Jersey Treasurer Andrew Sidamon-Eristoff released a list of $694 million of spending
cuts to close a mid-year fiscal 2014 budget gap. The measures include a recalculation and reduction of the
fiscal 2014 pension contribution by $94 million. The state’s fiscal 2014 budget-balancing actions reflect the
credit negative strain of New Jersey’s (Aa3 negative) persistent budget gaps and indicate that the state has
already exhausted some of the easiest spending reductions.
The pension contribution reduction is based on revised actuarial assumptions that will use current employee
contribution requirements, enacted in a 2011 pension reform, instead of lower, pre-reform contribution
levels. The lower state contributions are consistent with minimum legislative requirements. However, the
need to retroactively recalculate the amounts indicates that the state’s financial position is weaker than
expected and that more typical budget balancing solutions have already been exhausted. Additionally, while
the changes provide budgetary relief through fiscal 2018, pension costs will be higher in later years than they
would have been without the adjustment.
While the budget gap is only 2.3% of the revised fiscal 2014 budget, this is the third consecutive year that
revenue shortfalls have required mid-year budget balancing. Through December 2013, the state’s revenues
had grown 5.7% year-over-year but were $331.7 million below the budget forecast. The state’s recurring
mid-year revenue shortfalls reflect both the one-year lag in the economic recovery and optimistic revenue
As a result of recurring budget gaps and increasingly limited options, the state continues to use one-time fixes
that indicate above-average financial weakness. Non-recurring budget solutions include debt restructurings
for debt service savings, and in fiscal 2013, a one-time shift in Homestead Benefit payments that crossed
fiscal years. Earlier this month, the state provided an enhancement to tobacco securitization bonds,
committing additional Master Settlement Agreement receipts to a 2041 maturity in return for an upfront
payment of approximately $92 million. The payment provided both budgetary relief and helped shore up the
state’s narrow liquidity position.

By: JXC Fri, 28 Mar 2014 12:49:17 +0000 This article is completely unfair to Puerto Rico. The GDB uses the US Bureau of Labor Statistics jobs data as part of its economic index. This is responsible and it makes sense as the BLS data is the authoritative data on jobs statistics. Each March the BLS goes back and revises years of previous data for states and metropolitan areas, and this year (as with 2013) PR saw a large revision. This isn’t unique to PR, for example California’s data was also significantly revised. Given the revised BLS data, the GDB had to revise its own data going back for years. Cate, what else should they have done–continued to use the old, inaccurate data?

This is irresponsible journalism. Next time I suggest a bit more research before accusing a government of “doping” data. Maybe a call to the BLS and GDB before posting would have cleared this up?

By: CraigL Thu, 27 Mar 2014 12:49:32 +0000 > They seem to be “doping” the data.
> Maybe Puerto Rico is doping the numbers.

If anyone is “doping,” that would certainly be you, Cate, as well as other journalists who also seem to have a personal agenda against PR. It is the BLS that changed the employment numbers, so go attack them, not PR. What is the basis for your insinuation that PR cooked the books and BLS was complicit in the process? Is there an editor or a publisher at Reuters who is reading this biased stuff you are continuously producing about PR???

Here are the facts:
“Every March the BLS publishes the benchmark revision of the payroll employment. Each revision changes the employment figures for the previous 21 months.

The revision released in March 2013 increased the 2012 average level of payroll employment by 18,433 employees with respect to the previous employment estimates published until December 2012. Moreover, the revision released in March 2014 increased the 2013 level of payroll employment by 21,275 jobs with respect to the estimates released until December 2013.”