Category Archives: State & Local Finance

Louisiana Legislators Are Earning Big Money From Government Agencies — But Don’t Have to Disclose It All

Source: Rebekah Allen, The Advocate, April 13, 2018

One state senator earned $836,000 in legal fees representing a sheriff. The amount he disclosed: $13,328. “The notion that you could get public money and not report it in our flim-flammery of an ethics system is ridiculous,” an ethics expert says.

Medians – Solid financial metrics, ability to raise rates underpin stable sector

Source: Evan W Hess, Matt Jaffe, Lauren Von Bargen, Leonard Jones, Alexandra S. Parker, Moody’s, Sector Comment, Water and sewer utilities – US, April 5, 2018
(subscription required)

Municipal water and sewer utilities continue to demonstrate a stable to modestly positive financial performance, according our latest medians data. The steady performance is primarily driven by utility systems’ willingness and ability to raise rates to support operations and debt service. However, declining asset condition across the sector indicates an underinvestment in infrastructure. These credit factors, which are key to our stable outlook for the sector, are set to continue….

Rating changes for the 50 states from 1970

Source: Emily Raimes, Nicholas Samuels, Kenneth Kurtz, Ted Hampton, Baye Larsen, Marcia Van Wagner, Genevieve Nolan, Matthew Butler, Pisei Chea, Timothy Blake, Moody’s, Sector Comment, State government – US, April 6, 2018
(subscription required)

This report is part of a series that identifies changes in state general obligation (GO) and issuer ratings and outlooks. The report is produced on a quarterly basis with the last publication in January 2018. We maintain GO or equivalent issuer ratings for 49 states. Stable outlooks apply to 43 states, and six states have negative outlooks. The data included in this report reflect rating changes for each state by year, a list of all state GO or issuer ratings by category, and a list of all state outlooks.

Substantial increase in federal funding is credit positive for sector

Source: Dmitriy Plit, Florence Zeman, Moody’s, Sector Comment, Public housing authorities – US, April 4, 2018
(subscription required)

The recently enacted federal omnibus spending bill appropriates $2.75 billion for the Public Housing Capital Fund, a substantial increase over the $1.94 billion for federal fiscal year 2017.

State Higher Education Finance (SHEF) Fiscal Year 2017

Source: State Higher Education Executive Officers, 2018

From the press release:
In FY
201 7, for the first time in our nation’s history, more than half of all states relied more heavily on tuition dollars to fund their public systems of higher education than on government appropriations, despite increased state and local support for public colleges and universities. That’s the overarching narrative of the State Higher Education Finance (SHEF) FY 2017 report, a comprehensive, nonpartisan analysis of educational appropriations, tuition revenue and enrollment trends in all 50 states, released today by the State Higher Education Executive Officers Association (SHEEO).

In FY 2017, states saw a moderate increase in state and local support for higher education, along with a slight increase in tuition revenue and nearly no change in full-time equivalent (FTE) enrollment. Yet despite five straight years of increases in public investments, constant dollar state support of higher education per FTE student remains $1,000 lower than before the 2008 Great Recession and $2,000 lower than before the 2001 dot-com crash. What’s more, states are increasingly dependent on tuition revenue as a major funding source for public colleges and universities, which could pose significant sustainability challenges as states continue their efforts to increase the percentage of their residents with some education beyond high school to meet their workforce needs. ….

….Five key takeaways from this year’s report include:
1. Overall, states moderately expanded their support for higher education in FY 2017. ….
2. State financial aid for students attending public institutions reached an all-time high. ….
3. For the first time, more than half of all states relied more on tuition than on government appropriations to finance their systems of higher education. ….
4. Total educational revenues are at the highest level since 1980. ….
5. Full-time equivalent (FTE) enrollment continues to taper, though not significantly. ….

Related:
Interactive data
Full Unadjusted Dataset – Excel
Appropriations, Tuition, and Enrollment, by State – Excel
Changes since Great Recession, by State – Excel
Figures and Tables

Labor Renaissance in the Heartland

Source: Lois Weiner, Jacobin, April 6, 2018

Red state teachers are reviving the labor movement’s core values: respect for democracy and the dignity of work.

Related:
The Teachers’ Strikes Have Exposed the GOP’s Achilles Heel
Source: Eric Levitz, New York Magazine, April 5, 2018

Last week, Republicans in Oklahoma voted to raise taxes on fossil fuel companies, so as to increase pay for public sector workers. That might sound like a perfectly ordinary thing for a state government to do. But in Mary Fallin’s Oklahoma, it’s anything but. This is a state that responded to a $1.3 billion budget shortfall in 2016 by cutting taxes on the rich, and renewing a $470 million tax break for oil and gas companies. It’s a state that has allowed fracking interests to turn it into the earthquake capital of the world; let a gas company literally dictate policy to its attorney general; and forbade itself from raising taxes on anyone unless three-fourths of its state legislature approves (and its state legislature is dominated by tea party conservatives). All this has made increasing taxes on the state’s top industry so unthinkable to Oklahoma Republicans, they have repeatedly found it preferable to plug budget gaps by raiding their state’s emergency funds, and forcing one-fifth of its school districts to adopt four-day weeks instead.

Thus, it was more than a little remarkable when, last Thursday, Governor Fallin signed her name to a bill that more than doubled the state’s tax on fossil fuel production, limited itemized deductions for high-earning individuals, and gave a $6,000 raise to the state’s teachers…..

The Real Cost of Luring Big Companies to Town

Source: Sarah Holder, City Lab, March 29, 2018

A new economic analysis suggests that when cities and states offer tax deals for large companies, public education suffers and incomes eventually fall.

Related:
Who Benefits From Economic Development Incentives? How Incentive Effects on Local Incomes and the Income Distribution Vary With Different Assumptions About Incentive Policy and the Local Economy
Source: Timothy Bartik, W.E. Upjohn Institute, 2018

From the abstract:
As state and local governments have assembled lavish incentive packages to lure business such as Foxconn and Amazon, many have questioned whether these incentives are a good deal. In a new report from the Upjohn Institute, Senior Economist Timothy Bartik shows that the typical incentive package has only modest benefits for local jobs and incomes. Carefully targeted incentives can provide much larger local benefits, but those that draw money from public services such as education can significantly harm local economies.

Policy Brief
Executive Summary

Teachers Rise Up For Raises

Source: 1A, April 3, 2018
(audio)

The success of the teachers’ strike in West Virginia, which resulted in a 5 percent pay increase, has inspired a movement among educators across the nation. Teachers and their supporters have staged demonstrations in Oklahoma, Kentucky and Arizona, closing down some public schools in those states — and more strikes could be coming soon. Average annual wages for K-12 teachers range from $59,000 to $61,000 nationally, but many classroom educators in red states earn thousands less than the average. How are local governments addressing teachers’ demands? And how is the new national conversation over compensation altering our ideas about what a teacher is worth?

Related:
5 things to know about the teacher strike in Oklahoma
Source: Erin McHenry-Sorber, The Conversation, April 3, 2018

The Oklahoma teachers strike is about more than just pay, but rather a longstanding pattern of decline in funding for the state’s public schools.