Author Topic: States use gimmicks, late payments and other accounting tricks to meet.......  (Read 227 times)

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Offline oldcoastie6468

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EXography: States use gimmicks, late payments and other accounting tricks to meet balanced budget requirements
BY MARK FLATTEN | FEBRUARY 18, 2014 AT 4:43 AM

Paying bills late, selling buildings and swiping money from special accounts are some of the gimmicks states are using to bypass balanced budget requirements, according to a new report on the tricks being used to paper over deep deficits.

From California to New Hampshire, state governments are using smoke and mirrors instead of cash to meet the constitutional or statutory mandates that they finish their fiscal years with balanced budgets, according to research from State Budget Solutions, a non-partisan group that monitors state spending.

The total accumulated state debt is about $5.1 trillion, or about $16,178 for every American, according to SBS.

“It’s really a terrible situation that keeps compounding year after year,” said Joe Luppino-Esposito, editor and counsel at SBS. “There absolutely will be a day of reckoning. The biggest joke of it all is that almost every state says it has a balanced budget. A lot of them claim that they have a surplus every year.”

The most costly gimmick is underfunding annual payments for government pensions. States now face about $3.9 trillion in unfunded pension liabilities, according to SBS.

California is by far the biggest offender, with more than $583 billion in underfunded pensions. Four states continued to significantly underfund required pension payments in 2013: California, Illinois, New Jersey and New York, SBS research shows.

Pension underfunding occurs when states either use unrealistic projections of future earnings from investments or simply do not make their required contributions to pay for future benefits.

The SBS calculations use market-based projections to calculate future pension fund earnings, rather than the much more optimistic figures used by most states.

Requirements for a balanced budget vary. The National Conference of State Legislatures says 49 states have some balanced budget requirement, though in several states the mandate is weak or unclear. Vermont is the exception.

With the definition of a balanced budget so murky, state governments have long used tricks to make it appear on paper they are not going deeper in debt.

Among the most common gimmicks identified by SBS in 2013:

http://washingtonexaminer.com/exography-states-use-gimmicks-to-meet-balanced-budget-requirements/article/2544142
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Offline richb

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No surprise the worst four.   Illinois,  New Jersey,  New York and California.  All blue states with Dem statehouses, Dem (and one RINO) governors.

I imagine it far worse then anyone imagines too.   I would think that every single state is technically bankrupt if the rules that apply to private people and business were the same for government. 

Offline Glock32

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When this whole house of cards finally goes it's going to make the Great Depression look like a minor inconvenience.  There's really no other explanation for all this than the desire to live large today at the expense of tomorrow.

We have an entire political establishment based on Bread & Circuses today, and paying for it tomorrow. This is going to be very painful. All any of us can do is try to prepare for it, and more particularly for all the follow-on effects.
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Offline Libertas

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This Mark Flatten fella, he emerge from a long coma or something?  This is nothing new, it's just growing in magnitude is all.  All is well, the progressive elites got it all under control.  I say let them pretend all is well.  I say load up the system, overwhelm it, and make sure all the right people get the proper attribution.
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Offline Libertas

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It's amazing how long this crap can limp along...

https://www.bloomberg.com/news/articles/2017-10-25/even-illinois-s-cfo-doesn-t-know-how-many-state-bills-are-unpaid

OK, y'all in business...y'all with incomes...how many just have no clue who they owe or how much?  Yeah, not seeing any hands...

Only in government can ignorance, incompetence, idiocy, sloth, corruption and accountability (funny, all progressive traits) be tolerated...

Irrumabo!  GOP? - Nope. No more. They made their bed, now let them die in it.*
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Online ToddF

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It doesn't look like the cream of the accounting profession pursues government work, does it?

Offline Libertas

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Nope, more like the slime at the bottom of a barrel... 

Actually, I think they get bonus points for being idiots on most government employment scoring...
Irrumabo!  GOP? - Nope. No more. They made their bed, now let them die in it.*
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