Labor and Employment

State eNews Issue #39 | February 3, 2010


President Barack Obama’s State of the Union speech, with its strong jobs and middle-class families themes, seemed to echo the famous Clinton campaign war room posting, “It’s the economy, stupid.”

As the national economy warily recovers from the Great Recession, state finances continue to face monumental challenges in grappling with the sharpest drop in tax receipts in decades.  And, even after slashing their budgets substantially in fiscal year 2009, states are staring at new mid-year gaps that have opened up in the current fiscal year (2010) with more gaps forecasted for fiscal years 2011 and 2012.  While none of this is new information, what makes the state fiscal outlook quite daunting is that the current revenue shortfalls and huge budget gaps masks a number of enormous fiscal challenges looming in such areas as healthcare, education, public pensions, emergency management,  infrastructure, transportation and unemployment insurance.  States will have to contend with these significant challenges once the current crisis abates.

States are using a variety of tactics to get people back to work through retraining programs, most of which are on community college campuses.  Big enrollment increases, couple with state budget cuts, is leaving many colleges in a fiscal crisis.

While the Recovery Act has made unprecedented investments in clean energy, energy efficiency, and other environmental improvements, a new report by The Council of State Governments finds that in most states the wave of green jobs tied to these investments has yet to arrive.

 

States bear enormous responsibility for administering the nation’s safety net programs. They are the first responders when unemployed workers apply for unemployment benefits, food assistance and welfare. The American Recovery and Reinvestment Act of 2009 expanded some safety net support, temporarily filling in some of the benefit gaps.

Broadly, this presentation comprises five interconnected parts.  Part I explores the impact of recent market losses on state retirement systems.  Part II reviews why it is important for policymakers to focus on the financial position of state retirement systems.  Part III looks at where we stand in terms of state pensions and Part IV provides a snapshot of several key developments related to these plans.  Finally, Part V describes the various strategies deployed in states across the country to bolster their pension systems.

Suggested State Legislation: This Act creates the “Nonimmigrant Agricultural Seasonal Worker Pilot Program” in the state department of labor. The purpose of the program is to expedite the federal H-2A Visa certification process to enable eligible workers to come to the state legally to meet the staffing needs of farmers and ranchers in the state.

In stark contrast to the difficult fiscal positions states such as Michigan and Ohio face—primarily as a result of the decreasing automobile sector there—the auto industry continues to flourish in the South, generating billions of dollars in economic impact and creating thousands of direct and indirect jobs.

CSG South

The Council of State Governments’ Southern office, the Southern Legislative Conference (SLC), has researched, reviewed and published a series of reports on the status of public retirement systems in recent years. Continuing this trend, this Issue Alert seeks to apprise policymakers in the SLC states on a recent development in states across the country: the increased scrutiny of actuarial estimates in public pension plans and their role in influencing the overall financial health of these plans.

CSG South

Very few topics generate as much interest among both policymakers and the general public as a discussion on the financial viability of the United States’ retirement infrastructure. Research indicates that every element of our nation’s retirement architecture, both private and public, remains tenuous—a development that demands the focus of policymakers at every level of government.

Public pension plans are an important component of the U.S. economic architecture. This issue brief highlights the need for policymakers to focus on retirement systems, the finances of state retirement systems, several key developments and strategies employed in states across the country to bolster the finances of their pension systems.

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