Archive for the ‘Debt’ Category
Taking official numbers from the annual Treasury Department debt report as of June 30, 2016 has the state’s total Bonded and Non-Bonded Obligations at $171,560,258. What was that number on June 30, 2009 before the governor who balanced every budget came aboard?
nj101.5 reported on New Jersey’s long-term debt based on the annual Treasury Department debt report as of June 30, 2016 made public Friday with some telling observations:
The pension liability isn’t the number the state uses to decide how much to contribute – or rather, should contribute – to its pension funds.
The “unfunded actuarial accrued liability” for the state-administered pension funds is $49 billion. To help repay that, plus make the current payment, the state should put in a little over $5 billion in the upcoming fiscal year. Instead it plans to put in $2.5 billion.
The numbers look even more daunting if alternate accounting and actuarial methods are used.
The debt report discloses those in supplemental information at the back of the publication, because they’re not required in official financial disclosures and don’t impact state budget decisions.
Those analyses peg the liabilities as high as $136 billion for pensions and $68 billion for health benefits.
Just one problem here.
The Mercatus Center just sent out an email announcing:
The 2016 edition of “Ranking the States by Fiscal Condition” is now available, providing the most comprehensive snapshot to date of the financial health of all 50 states and Puerto Rico. What’s the big news from the latest numbers? Puerto Rico is in trouble, and so are many states if they don’t address their short- and long-term obligations. The rankings reflect the past, present, and future of each state, beyond what one individual politician can control. They serve as an early warning sign for policymakers, journalists, and the public before fiscal issues become bigger problems.
Data was taken from 2014 CAFRs and the Mercatus people were good enough to provide excel spreadsheets that included unfunded pension and OPEB liabilities along with regular state debt. Totaling those into spreadsheets shows that indeed there are states with higher per-capita long-term debt burdens than Puerto Rico (and Illinois is not one of them).
Here is a listing of New Jersey’s credit downgrades over the last five years:
- 2/9/11 S&P Downgrade: AA- from AA
- 4/27/11 Moody’s Downgrade: AA3 from AA2
- 8/18/11 Fitch Downgrade: AA- from AA
- 4/9/14 S&P Downgrade: A+ from AA-
- 5/1/14 Fitch Downgrade: A+ from AA-
- 5/14/14 Moodys Downgrade: A1 from AA3
- 9/5/14 Fitch Downgrade: A from A+
- 9/10/14: S&P Downgrade: A from A+
- 4/16/15: Moodys Downgrade: A2 from A1
More will come if the state has to pay COLAs again.
During the Trump/Fiorina dust-up over their records:
there were three moments when it appeared they had stumbled onto issues of real importance:
It never happened.
Carly Fiornia came closest in referencing the debt politicians have run up and alluding to New Jersey but seemed to think better of using up her 30 seconds to flog Christie’s dead horse of an administration so we never got into where New Jersey ranks.
But Truth in Accounting(TIA) does get into it:
Local governments are piling up debt at such an alarming pace that this blogger called it the next crisis “nobody saw coming”.
New Jersey put a cap on the amount local governments can raise by taxation so to keep their gravy trains fueled at least one local government has taken to bonding to make up the difference and nobody with any oversight capacity seems to care. State governments, accountants, rating agencies, and the media all do not want to see the crisis because that would not be to their advantage.