Whether to charge fines for overdue materials is a hot-button topic. The issues are many: Some libraries have halted the practice, citing concerns that fines keep patrons away, while other libraries have kept them in place as vital revenue streams. Fines are also used by some libraries as a method to teach personal responsibility, while other libraries consider that lesson outside the realm of librarianship. We spoke with a librarian on each side of the debate….
Source: Susan E Shaffer, Susan I Fitzgerald, Kendra M. Smith, Moody’s, Sector Comment, August 6, 2018
While our outlook for the higher education sector remains negative, 2018 growth of several revenue streams has been more favorable than anticipated. Both an improved federal research funding environment and ongoing favorable investment returns are credit positive for the sector. For public universities, overall state fiscal conditions are improving, leading to stable-to-growing appropriations for fiscal 2019. However, moving into fiscal 2019, flat enrollment — declining in certain regions of the country — and a continued focus on affordability will likely continue to limit growth in tuition and fees, the largest revenue stream supporting the sector….
Community Colleges – Reauthorization of federal career and technical funding credit positive
Source: Patrick McCabe, Susan I Fitzgerald, Kendra M. Smith, Moody’s, Sector Comment, August 6, 2018
On July 31, the Strengthen Career and Technical Education for the 21st Century Act (Perkins V) was signed into law, reauthorizing the Carl D. Perkins Career and Technical Education Act initially approved in 1984. This federal grant initiative, centered on state and local career and technical education (CTE), serves as an important funding source for secondary and postsecondary programs designed to align training and work-based learning opportunities with evolving workforce needs. Perkins V renews and updates the federal government’s commitment to these goals, an overall credit positive for the community college sector and community colleges’ efforts to improve cooperative education opportunities.
Source: Robert Weber, Thomas Jacobs, Moody’s, Sector Comment, August 8, 2018
On 1 August, the New York State (Aa1 stable) Comptroller’s Office announced that first half of calendar year 2018 sales tax collections grew 6% over 2017, the highest six-month increase since 2010. Sales tax revenues are a significant revenue stream for many counties and cities across New York, and sales tax growth also indicates that New York’s economy is improving. Additionally, the early effects of the federal tax law may be having a positive influence on people’s buying habits through the first half of 2018. As a result, these results are credit positive for many cities and counties in New York.
Deficit financing legislation helps distressed local governments but lacks teeth
Robert Weber, Thomas Jacobs, Gregory W. Lipitz, Naomi Richman, Leonard Jones, Moody’s, Sector Comment, August 8, 2018
New York’s (Aa1 stable) legislation allowing municipalities to issue bonds to liquidate operating deficits is an important tool for local governments mired in financial distress. However, accessing this deficit financing has produced mixed results, providing a one-time influx of cash but still leaving local governments vulnerable to poor management decisions.
Source: Dan White, Sunayana Mehra, Martin Wurm and Emily Mandel, Regional Financial Review, July 2018
QRATE is a quantitative ratings estimator designed by Moody’s Analytics to estimate municipal issuer credit quality based solely off of quantitative economic, demographic and financial metrics for a given issuer at a given time. The models cover all 11 sectors of the municipal market and allow users to calculate quantitative QSCORES based off some of the same analyst-adjusted financial data used by Moody’s Investors Service. A QSCORE is a numerical value that can be mapped to a standard letter rating equivalent, as well as estimated probability of default and loss-given-default measures.
From the abstract:
Local newspapers hold their governments accountable. We examine the effect of local newspaper closures on public finance for local governments. Following a newspaper closure, we find municipal borrowing costs increase by 5 to 11 basis points in the long run. Identification tests illustrate that these results are not being driven by deteriorating local economic conditions. The loss of monitoring that results from newspaper closures is associated with increased government inefficiencies, including higher likelihoods of costly advance refundings and negotiated issues, and higher government wages, employees, and tax revenues.
How closures of local newspapers increase local government borrowing costs
Source: Vivien Lee and David Wessel, Brookings Institution, Up Front blog, July 16, 2018
Local newspaper closures increase local government borrowing costs, according to a paper to be presented at the 2018 Municipal Finance Conference at Brookings. The paper, “Financing Dies in Darkness? The Impact of Newspaper Closures on Public Finance,” also finds that local newspapers are especially important in states with low quality governance, and that online media are not acting as sufficient substitutes for local papers.
Pengjie Gao of the University of Notre Dame and Chang Lee and Dermot Murphy of the University of Illinois at Chicago are among the first to examine the effect of reduced local news coverage on local government finance. From 2003 to 2014, the circulation of local newspapers decreased by 27 percent, and statehouse reporters decreased by 35 percent.
Using data on local newspapers and municipal bond yields from 1996 to 2015, the authors compare municipal bond yield spreads for counties with three or fewer local papers before and after a closure, to counties where no local papers closed. Three years after a newspaper closure, municipal bond yields in that county increase by 0.05 to 0.11 percentage points, they find. The authors find similar results when comparing the effect of closures on bond yields between counties with few local newspapers and counties with many papers. They argue that this is because closures in counties with high numbers of local newspapers will probably not affect local news coverage, as other newspapers may fill in any potential information gaps.
Source: RAND, 2018
From the summary:
Medicare-certified hospitals and other institutional providers are required to submit an annual cost report to a Medicare Administrative Contractor. Cost reports contain provider information such as facility characteristics, utilization data, cost and charges by cost center (in total and for Medicare), Medicare settlement data, and financial statement data. The Centers for Medicare & Medicaid Services (CMS) maintains the cost report data in the Healthcare Provider Cost Reporting Information System (HCRIS). The RAND Hospital Data tool is an effort to enhance CMS HCRIS data to make them more accessible and useful to a broad audience of academics, analysts, and hospital executives and their consultants. The tool provides users with data sets that are conveniently packaged and documented and that include value-added fields derived from HCRIS data, such as measures of occupancy and profitability. The goal of the tool is to make analytic tasks easier for those who work regularly with the data and to broaden the set of users.
Nearly 1.5 million Americans were incarcerated in state prisons in 2016. That same year, U.S. states spent about $58 billion to keep these people locked up.
How much each state spends on prisons goes far beyond a simple per prisoner calculation. In fact, there is little to no correlation between the states that spend the most per capita and the states with more prisoners per capita. Instead, variations in state spending boil down to a range of budgetary factors and policy decisions.
Prisons have many expenses related to their main function of confining lawbreakers. In addition to securing the prisoners with infrastructure, technology, and personnel, they have to provide inmates with basic necessities such as food, health care, and even entertainment. On a per capita basis, state prison spending ranges from less than $100 per person to nearly $500 per person. 24/7 Wall st. reviewed the states with the highest and lowest prison spending per person. ….
…. To identify how much each state spends on corrections, 24/7 Wall St. reviewed state prison spending from the National Association of State Budget Officers, as collected by The Sentencing Project, a nonprofit focusing on criminal justice reform. Average annual correctional officer salaries are from the Department of Labor. Incarceration rates and the share of prisoners in private prisons are from The Sentencing Project, and crime rates per 100,000 are from the FBI Unified Crime report. All figures listed are for 2016, with the exception of the private prisoner figure, which is for 2015. ….
Source: S&P Global Finance, July 26, 2018
Midway through 2018, accelerating economic growth is providing a favorable near-term backdrop for credit conditions in the state and local government sectors. According to S&P Global Ratings’ updated baseline forecast, U.S. GDP is on a trajectory to expand by 3.0% in real terms in 2018….
Source: ProPublica and WBEZ, 2018
Parking, traffic camera and vehicle tickets generate millions of dollars in desperately needed cash each year for the City of Chicago. But for the working poor, and particularly for African Americans, paying for tickets can be difficult — opening the door to more fines and fees, and spiraling debt. Drivers who don’t pay what they owe face tough punishments from the city and state that threaten their livelihoods.
Chicago Hiked the Cost of Vehicle City Sticker Violations to Boost Revenue. But It’s Driven More Low-Income, Black Motorists Into Debt.
Source: Melissa Sanchez, ProPublica, and Elliott Ramos, WBEZ July 26, 2018
Now, a former official regrets the move and wants the city to revisit it. Some policies, she said, are “terrible.”
How ProPublica Illinois and WBEZ Worked Together to Find Thousands of Duplicate Tickets in Chicago
Source: Melissa Sanchez, ProPublica, and Elliott Ramos, WBEZ July 6, 2018
We heard from you about how ticket debt, especially from $200 city sticker citations, has affected you. And we would like your help as we continue our reporting.
Three City Sticker Tickets on the Same Car in 90 Minutes?
Souce: Melissa Sanchez, ProPublica, and Elliott Ramos, WBEZ June 27, 2018
Chicago has issued 20,000 duplicate city sticker tickets since 2007. City officials are now looking at whether this violates a city ordinance and say motorists might be in for a refund.
Chicago Begins To Rethink How Bankruptcy Lawyers Get Paid
Source: Melissa Sanchez, ProPublica, May 9, 2018
Judges are demanding that lawyers tell their clients that their other debts might not get paid, but their lawyers will.
Some States No Longer Suspend Driver’s Licenses for Unpaid Fines. Will Illinois Join Them?
Source: Melissa Sanchez, ProPublica, March 15, 2018
Our analysis shows suspensions tied to ticket debt disproportionately affect motorists in largely black sections of Chicago and its suburbs.
She Owed $102,158.40 in Unpaid Tickets, but She’s Not in the Story
Source: Melissa Sanchez, ProPublica, March 2, 2018
Still, we want to tell you a little bit about her, and about some of the other people we interviewed, because they helped inform our ticket debt investigation.
How Chicago Ticket Debt Sends Black Motorists Into Bankruptcy
Source: Melissa Sanchez and Sandhya Kambhampati, ProPublica, February 27, 2018
A cash-strapped city employs punitive measures to collect from cash-strapped black residents — and lawyers benefit.
The Many Roads to Bankruptcy
Source: Melissa Sanchez, ProPublica, February 27, 2018
Here are some stories of Chicagoans driven into ticket debt.
The state is caught in an economic straitjacket and there’s no easy way out…..
…. Blue chip companies like General Electric have either left or are threatening to leave. A yawning budget deficit continues to loom over the state, amplified by some of the nation’s most glaring economic inequality. Greenwich, home to hedge funders and Manhattan corporate titans, and the Norman Rockwell suburbs of Westport, New Canaan and Darien share few priorities with Hartford, New Haven and Bridgeport, gritty cities struggling with searing poverty and fiscal disaster. Connecticut’s political leaders must choose between what seem like equally rotten options: cut services, and push more burden onto the urban poor, or hike taxes, and risk repelling both the suburban rich who pay much of the freight and new businesses that might consider moving here. Put simply, Connecticut is in a bind with precious little room to maneuver.
Connecticut’s troubles are extreme but hardly unique. The recovery that has entrenched Connecticut into the haves and have-nots has been unequal in other regions as well – from Florida to California and down to Texas. As the stock market climbs but wages remain relatively flat, the Constitution State serves as a troubling bellwether of national priorities that seem to favor wealth creation for the few before investments in the broader economy. ….