Economics and Finance

Pension Reform Necessary, but Not Easy

 

Rhode Island has made three attempts at pension reform in the past three to six years. But last year when lawmakers considered the issue once again, they decided to make it a complete reform, said Richard Licht, Rhode Island director of the Department of Administration.


America’s Forgotten Borders Merit More Attention

 

The U.S. is an arctic nation. It’s also a Caribbean nation.

While Alaska and Puerto Rico put the U.S. into those categories of nations, the interests of those states don’t typically make it to the top tier of American concerns. These forgotten borders were the topic of the International Committee meeting discussion Friday morning.


House to Consider Bill Limiting Ability of States to Tax Nonresidents

The U.S. House of Representatives on Tuesday, May 15, considered H.R. 1864, known as the Mobile Workforce State Income Tax Simplification Act. The bill would limit a state’s ability to tax the income of nonresidents if they work in the state for 30 days or less.


State Minimum Wages

Legislators in several states are considering raising the minimum wage this year, but the issue is controversial. Proponents of raising state minimum wages argue that while the federal rate has remained stagnant—it hasn’t increased since 2009—the costs for housing, food, utilities and health care have continued to climb. This leaves those earning minimum wage with less money to afford the basics, which in turn puts downward pressure on the demand for goods and services. Opponents warn that raising the wage now would have a negative impact on businesses—especially during anemic economic times—and that a minimum wage hike actually hurts those that it intends to help by forcing employers to cut jobs at the low end of the pay scale.


State and Local Pension Watch: Total Holdings and Investments Rebound in 2010

According to a new report by the U.S. Census Bureau, state and local public-employee retirement systems had $2.7 trillion in total cash and investment holdings in 2010, a $257.2 billion (10.6 percent) increase over 2009. This is the first year that state and local retirement systems have shown positive earnings since 2007, just before financial markets – and public pension assets – took a dive. Those retirement systems saw a $722.2 billion loss in 2009 and a $178.8 billion loss in 2008.


States Consider Minimum Wage Hikes

A number of states are considering raising their minimum wages this year and/or tying those wages to an inflationary measure. Proponents of raising state minimum wages argue that while the federal rate has remained stagnant (it hasn’t increased since 2009), the costs for housing, food, utilities and health care have continued to climb, leaving those earning the minimum wage with less money to afford the basics, which in turn puts downward pressure on the demand for goods and services. Opponents warn that raising the wage now would have a negative impact on businesses – especially during anemic economic times – and that a minimum wage hike actually hurts those that it intends to help by forcing employers to cut jobs at the low end of the pay scale.


State Energy Program

In the early stages of the American Recovery and Reinvestment Act, one particular program—the $3.1 billion State Energy Program—had more than its share of controversy. Eventually, however, every state and territory accepted the money, but some have been slow to spend those funds. Now, the clock is ticking: States have until April 30 to spend their remaining balances. Multiple 

reasons explain why the program was slow to get off the ground and why states have had difficulties spending their allocated funds.

13 states lead in economic development oversight

With state revenue levels just beginning to recover from the Great Recession, responsibly stewarding every public dollar is imperative and ensuring state incentive programs – especially tax incentives – are garnering a return on investment is increasingly a concern for state officials. New research out by the Pew Center on the States finds that 13 states are leading the way when it comes to examining and evaluating their business incentive programs.


State Leaders to Debate Marketplace Fairness Act

The challenge of collecting sales taxes on out-of-state transactions is as old as the humble mail order catalogue. But in an age when consumers are buying everything from movies to groceries online, the issue is of growing importance to state fiscal health.

With Congress currently considering bipartisan legislation to allow states to enforce online sales tax collection, The Council of State Governments’ Intergovernmental Affairs Committee will discuss this critical issue at CSG’s National Leadership Conference in La Quinta, Calif., May 19.


New GAO report predicts short and long-term fiscal challenges for states

A new report out today by the U.S. Government Accountability Office explains that, while tax receipts have improved slowly alongside national economic recovery, state and local governments still face short and long-term fiscal challenges. In the short term, the loss of ARRA funding will continue to place downward pressure on state spending and although tax receipts have now returned to prerecession levels, with income and sales tax leading most of the gains, the tax growth rate flattened out in 2011. In the long term, rising health-related costs – primarily Medicaid – will continue to increase the gap between receipts and expenditures in the coming years absent any major intervention or policy changes.