Category Archives: State & Local Finance

Has the library outlived its usefulness in the age of Internet? You’d be surprised

Source: Donald A. Barclay, The Conversation, April 28, 2016

U.S. institutions of higher education and U.S. local governments are under extraordinary pressure to cut costs and eliminate from institutional or governmental ledgers any expenses whose absence would cause little or no pain.

In this political climate, academic and public libraries may be in danger. The existence of vast amounts of information – a lot of it free – on the Internet might suggest that the library has outlived its usefulness.

But has it? The numbers tell a very different story.

In spite of the findings of a survey in which Americans say they are using public libraries less, the usage numbers reported by libraries indicate the opposite.

In the last two decades, the total number of U.S. public libraries slightly increased – inching up from 8,921 in 1994 to 9,082 in 2012 (a gain of 2.14 percent). Over the same period, the data also show that use of public libraries in the U.S went up as well. ….
Digest of Education Statistics, 2014
Source: Thomas D. Snyder, Cristobal de Brey, and Sally A. Dillow, NCES Number: 2016006, April 28, 2016

From the abstract:
The 50th in a series of publications initiated in 1962, the Digest’s purpose is to provide a compilation of statistical information covering the broad field of education from prekindergarten through graduate school. The Digest contains data on a variety of topics, including the number of schools and colleges, teachers, enrollments, and graduates, in addition to educational attainment, finances, and federal funds for education, libraries, and international comparisons.

SHEF — State Higher Education Finance FY15

Source: Andrew Carlson, Sophia Laderman, State Higher Education Executive Officers Association (SHEEO), April 2016

From the press release:
State and local governments provided nearly $91 billion in FY 2015 to support higher education — an increase of more than $ 4 billion from the FY 2014 level but still lower than the level that prevailed before the Great Recession. Forty states increased their support which, coupled with a small decline in enrollment, caused the average state and local support per student (adjusted for inflation) to increase 5.2% to $6,966. That level remains 15.3% below the $8,221 per student provided in FY 2008, before the Great Recession. In fact, appropriations per student remain lower in 45 states than they were then. But the FY 2015 increase in state and local support, as was the case in FY 2014, contributed to a slowing in the rate of growth of tuition income per student (which increased by 2.5% per student in real terms in FY 2015), bringing the share of the cost of education borne by students and their families down to 46.5%, its lowest level since 2011. (Tuition’s share of revenue remains substantially above the pre-Great Recession level of 35.8 %.) These are among the highlights of a report released today by the State Higher Education Executive Officers Association (SHEEO). The thirteenth annual State Higher Education Finance (SHEF) report provides a comprehensive review of state and local funding, tuition revenue, enrollment trends , and degrees for public higher education — which enrolls and educates about 70% of all students in American postsecondary education programs…..
Click here for interactive SHEF data
Unadjusted Nominal Data Set (XLS)
State-by-State Wave Charts (XLS)

States Shine Light on Unspent Funds

Source: Carrie Abner, Council of State Governments, The Current State #59, April 25, 2016

For state budgets, every dollar counts. But this is perhaps even more so the case at a time when state economies are still recovering from the Great Recession.

That’s why New Mexico State Auditor Tim Keller decided to take a closer look at state accounts when he was elected in 2014.

In February, the New Mexico Office of the State Auditor released the second annual Fund Balance Report, which focuses on unspent funds in state government accounts that don’t automatically revert to the state’s general fund. …

It was a process that, according to Keller, hadn’t been done in his state for about a decade.

Other states have undertaken similar reviews, but typically with a more narrow scope. Texas has reviewed unspent dollars from its State Highway Fund, funded by gas taxes and vehicle registration fees, which in the past often were diverted to other government programs. Efforts by then-Gov. Rick Perry and House Speaker Joe Straus ended the practice in 2015, which was estimated to add $1.3 billion to the Highway Fund’s biennium budget, according to a 2015 Texas Department of Transportation Report. ….
Fund Balance Report – State Agencies, Fiscal Year 2015
Source: State of New Mexico, Office of the State Auditor, Government Accountability Office, February 2016

Money on the Sidelines: Report on Unspent Fund Balances Fiscal Year 2014, Volume I – State Agencies
Source: State of New Mexico, Office of the State Auditor, Government Accountability Office, March 2015

Policymaker’s Guide to Pay It Forward

Source: Kelli Smith, John Gibson, John Burbank, Economic Opportunity Institute, [2016]

From the summary:
….If higher education is to remain a public good, state governments can no longer ask students and their families to shoulder an increasing share of its costs. Policymakers can accomplish this using a combination of state investments that reduce tuition, increase need-based financial aid, and promote innovative programs to ensure continued growth in access to college. Pay It Forward is one such innovative program.

Pay It Forward is a college financing system under which, instead of paying tuition, participants would make post-graduation income-based contributions for a set period. Contributions are deposited into a state trust fund that directs payments to the participating colleges and universities, and that can be designed to become self-sustaining within one generation. It is not a loan or grant program, nor is it a replacement for tuition reduction or need-based aid. It is a social insurance program for higher education that can dramatically reduce students’ uncertainty about their future debt burden and supplement existing programs to serve a broader spectrum of students.

What sets Pay It Forward apart from other higher education proposals is that it is a long-term solution that would generate an ongoing and revolving source of revenue – fueled by forward-funding by graduates – all while replenishing and sustaining itself. It would open access to higher education by reducing high debt barriers and make a college degree possible without financially crippling an entire generation….

A Glimmer of Optimism in Government Savings Accumulation? An Empirical Examination of Municipal Unassigned Fund Balance in Florida

Source: Theodore Arapis, Vincent Reitano, Public Finance Review, Published online before print April 21, 2016
(subscription required)

From the abstract:
Few would question that the Great Recession and its aftermath have proved challenging for government financial management. This depressed economic environment has renewed interest in research involving the accumulation and use of the unassigned fund balance. In this study, we use data on Florida cities to examine the factors affecting the unassigned fund balance before, during, and after the Great Recession. According to our findings, building and maintaining savings at high levels have become routine for Florida cities, irrespective of their government form and the economic conditions they face. This research also provides evidence that Florida cities adapt their savings accumulation strategy, depending on the level of unassigned fund balance they are targeting. As a result, Florida cities consider different factors when accumulating unassigned fund balance above, rather than within or below, the minimum range suggested by the Government Finance Officers Association.

The Facts on Public Pensions

Source: Jennifer Burnett, Council of State Governments & Center for State and Local Government Excellence, April 7, 2016

From the summary:
Public pensions continue to be a topic of great concern to state policymakers across the country. Struggling from years of insufficient contributions, combined with longer-living retiree populations, many states face mounting public pension liabilities. Understanding how your state’s plan compares to others around the country and having access to reliable data about pension plans are both essential to making evidence-based policy decisions. This FREE CSG eCademy session, presented in partnership with the Center for State and Local Government Excellence, offers background on the state of public pension systems and introduces a free tool which can be used to inform debates about retirement security issues: Public Plans Data.

Jean-Pierre Aubry
Associate director of state and local research, Center for Retirement Research

David Craik
Pension administrator, Delaware

Elizabeth Kellar
President/CEO, Center for State and Local Government Excellence

Bert Scoglietti
OMB director of policy, Delaware


Projections of Education Statistics to 2023

Source: William J Hussar, National Center for Education Statistics and Tabitha M. Bailey, National Center for Education Statistics, NCES 2015073, April 2016

From the abstract:
This publication provides projections for key education statistics. It includes statistics on enrollment, graduates, teachers, and expenditures in elementary and secondary schools, and enrollment and earned degrees conferred expenditures of degree-granting institutions. For the Nation, the tables, figures, and text contain data on enrollment, teachers, graduates, and expenditures for the past 14 years and projections to the year 2023. For the 50 States and the District of Columbia, the tables, figures, and text contain data on projections of public elementary and secondary enrollment and public high school graduates to the year 2023. In addition, the report includes a methodology section describing models and assumptions used to develop national and state-level projections.

Why America’s Schools Have A Money Problem

Source: Cory Turner, Reema Khrais, Tim Lloyd, Alexandra Olgin, Laura Isensee, Becky Vevea, Dan Carsen, NPR, Morning Edition, April 18, 2016

How much money a school can spend on its students still depends, in large part, on local property taxes. And many states aren’t doing much to level the field for poor kids. ….

About The ‘School Money’ Project
School Money is a nationwide collaboration between NPR’s Ed Team and 20 member station reporters exploring how states pay for their public schools and why many are failing to meet the needs of their most vulnerable students. This story is Part 1 of 3. Next week, we ask: Does money matter? …

Puerto Rico’s Current Fiscal Challenges: In Brief

Source: D. Andrew Austin, Congressional Research Service, CRS Report, R44095, April 11, 2016

The government of Puerto Rico currently faces a serious fiscal emergency that is the culmination of longstanding budgetary, economic, and financial challenges. While Puerto Rico has made a number of structural reforms and has increased tax rates in the past few years, it had been unable to head off increasingly urgent fiscal challenges. ….