MuniLand

State and local hiring has not recovered

Two prominent media outlets, USA Today and Governing.com, have recently run stories that trumpet increased state and local government hiring. But both outlets make crucial errors in their calculations.

Let’s start with USA Today‘s story from June 27. Its analysis used the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey to claim that 800,000-plus new jobs had been created in muniland. But this number is a “turnover” number and not surprising since the sector employs over 19 million people.

Today Governing.com ran a story that riffed on what USA Today reported and made this further claim:

More public workers were hired in the first four months of 2012 than any other year period since 2008. The 828,000 new hires are filling positions that were left open to save money during the recession. The hiring boost indicates that state budget problems have relaxed and that public-sector job growth could be imminent. It takes at least six months for a hiring boost to create a larger workforce, according to the newspaper.

In fact when you total up state and local government hires for the first four months of 2012, there were 1,084,000 new employees filling positions. But these are not new positions that have increased the overall level of state and local employment. These are hires replacing employees who left current positions. Total state and local employment is actually down year-over-year, from 19.3 million in May 2011 to 19.2 million in May 2012.

MuniLand Snaps: July 5

The Big Bay Boom Fireworks Show in San Diego for 2012 was a “Big Bay Bust.” There was a technical problem and all of the fireworks went off within 30 seconds. The original Big Bay Boom was set to last about 15 minutes. (from  at YouTube)

Good Links

The Atlantic: The triumph of the family farm

Kaiser Health News: States balk at expanding Medicaid

Reuters: How Stockton went broke: A 15-year spending binge

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Mammoth Lakes needs to do a Half Moon Bay

Mammoth Lakes, a popular northern California ski town, has filed for Chapter 9 bankruptcy after mediation talks failed with its largest creditor, a developer who was awarded a $30 million settlement against the town in April 2008. The settlement has since ballooned to $43 million, including lawyer fees. Lawyers for the creditor, Mammoth Lakes Land Acquisition, say that the town is solvent and is just using the bankruptcy court to hide from the judgment they owe the company. Reuters’ Jim Christie reports:

Lawyer Dan Brockett said the town invited Mammoth Lakes Land Acquisition to enter into mediation only to follow the law until it could move forward with a bankruptcy filing.

“The mediation in our view was something they would do to check a box,” Brockett told Reuters, adding that his client will contest the town’s eligibility for bankruptcy.

MuniLand Snaps: July 3

video platform video management video solutions video player

Happy 4th of July! Listen to an archival recording of Senator John F. Kennedy reading the Declaration of Independence in its entirety. It was made for New York radio station WQXR’s 1957 July 4th observance (via LearnOutAloud.com).

Good Links

CBO: Estimates for the insurance coverage provisions of the Affordable Care Act

Stateline: Why are welfare rolls flat, while the food stamp program grows rapidly?

Moody’s: Moody’s proposes adjustments to U.S. public-sector pension data

The debate over Stockton’s solvency

The hearings for Stockton, California’s bankruptcy have not even begun and one of the city’s bond insurers, Assured Guaranty, is already pushing back on Stockton’s claim of insolvency:

Stockton’s city council “failed to make the politically tough decisions to adopt serious budget reforms and consider alternative plans to resolve its long-term structural deficit,” Assured added…

…Based on its own review of the city’s finances, Assured said Stockton could have considered alternatives to bankruptcy, like selling excess city property, raising taxes or fees, cutting non-essential services, restructuring debt, seeking more concessions from workers and pension reform, among other options.

MuniLand Snaps: July 2

 

From the Tax Foundation:

The growth of state government spending over the past decade. These percentages show the growth in direct spending between 2000 and 2010, in real dollars per capita (to eliminate the effects of population growth and inflation). Oklahoma leads the pack with a 74% increase in state government spending over ten years; Alaska, whose state government only grew 17% faster than its population, is at the bottom.

Good Links

Reuters: Analysis: Jumping off the fiscal cliff

GovTech: Health insurance exchanges getting more federal funding

Bloomberg: How Wall Street scams counties into bankruptcy

The Post Standard: It was all about the “golden cow” of tax breaks

Reuters: Securities trade group says the masking of large municipal trades should continue

Reuters: U.S. municipal bond sales to sink to $59 million

Calpensions.com: Bond insurer may contest Stockton bankruptcy

AP: Brilliant description of chaotic last few days of Pennsylvania budget fight

Birmingham News: Judge rules Jefferson County cannot use sewer revenues for legal fees

Will the Affordable Care Act be starved for funds?

Millions of uninsured Americans will now have access to healthcare as a result of the Supreme Court’s decision last Thursday to uphold the Affordable Care Act. This is a big step forward for the nation, but it raises questions about funding. The nation is already starved for revenue and is supposed to cut $1.2 trillion from the federal budget over the next eight years through the sequestration process.

Under sequestration, one or more of the three major areas of the budget – defense spending, Medicare or Medicaid – need to be cut. Congress is now trying to have President Obama show where these cuts will be made. But the Daily Caller is reporting that the president doesn’t intend to implement sequestration for the military:

President Barack Obama’s White House has told at least one defense contractor not to worry – sequestration isn’t really going to happen.

MuniLand Snaps: June 29

NPR: Saving California state parks: The end of public funding?

Good Links

Reuters: U.S. recovery varies greatly by state, county and city

GovTech: Dynamic maps track Colorado wildfires

AP: New California budget crafted to influence voters

University of Chicago: Building America’s new generation of arts facilities

Reuters: Stockton, California’s insured debt proves alluring

AP: Deal reached on tax breaks for Pennsylvania refinery

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Will governors support the healthcare expansion?

The Supreme Court’s decision to uphold the Affordable Care Act just created an unenviable task for governors across the country.

To grant healthcare coverage to all Americans, the ACA involves an expansion of Medicaid, a program jointly funded by the federal and state governments and administered by the states for the poorest Americans. Under the expansion, an estimated 18 million people who previously lacked health insurance will be swept into the Medicaid program. Even though the federal government will bear the full cost of this expansion in the first year and 90 percent of it in subsequent years, states will shoulder some of the program’s administrative costs.

Adding 18 million people to the Medicaid rolls is a challenge in itself, but it also comes amid fears that Congress will decide to cut spending on social programs like Medicaid as a way to decrease the federal deficit. Wary of unfunded mandates like this one, some governors are hinting that they will refuse to expand healthcare coverage under the Medicaid program despite the federal government’s offer to pay for nearly all of it:

Stockton hits the wall

The City Council of Stockton, California voted this week to adopt a “pendency budget” in preparation for filing for Chapter 9 bankruptcy, which will place the city under the protection of the bankruptcy court and stay all legal actions against it. This maneuver gives the city some breathing room to come to an agreement with its creditors, especially bondholders and retirees, over how to reduce what the city owes them. This comes after months of Stockton being under a state-imposed “mediation period” in which these kinds of negotiations were voluntary.

Reuters’ Jim Christie reports on the background of the story:

Stockton’s city council voted six to one in favor of the 2012-2013 budget after a contentious five-hour meeting where angry retired city workers pressed council members to reject the $155 million spending plan. It proposes eliminating retirees’ medical benefits to help fill a $26 million budget deficit…

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