Eileen Norcross is a senior research fellow with the Mercatus Center at George Mason University, who leads the Mercatus’ State and Local Policy Project.
Illinois’ pension problems are big—far bigger than the $100 billion funding gap the legislature said it tackled earlier this week with a new set of reforms. The funding gap is actually double that—well over $200 billion—when calculated on a fair-market basis. Illinois is committed to fully funding the actuarial liability (and some are encouraging the system […]
As The Hill reported, and as Joshua noted yesterday, the Obama administration will send Detroit $320 million in federal dollars in emergency funds. The funds will be used to demolish properties, hire police and firemen, install security cameras on buses, and fix streetlights. Detroit is currently in bankruptcy proceedings and faces $18.5 billion in unpaid debts. […]
Detroit’s move to file for bankruptcy on July 18 is not a surprise. The city’s ongoing economic and fiscal problems are well-known. Two years ago, Mayor David Bing warned that without structural reforms to benefits, budget cuts, and other measures, Detroit would find itself without enough resources to meet debt and benefit liabilities, which the […]
Much has been said about the trouble with public-sector pensions. Many state and local plans are underfunded and, unless policy and accounting changes are undertaken, some major plans will run out of assets to pay benefits over the coming years. That means these plans will have to operate on a pay-as-you-go-basis, forcing budgetary tradeoffs and […]
I have a piece running at U.S. News and World Report that asks if Hollywood really needs the tax credits that states are all too eager to give to film companies. And more importantly, do states get much in return? Recently, Maryland Governor Martin O’Malley tripled the state’s film credit program from $7.5 million to […]
Illinois has the distinction of having the worst-funded pension plan in America. In addition to a massive funding shortfall, the state also has the lowest credit rating and owes “$10 billion in backlogged payments to vendors, schools, hospitals and charities”. Pension plan payments make up 22 percent of the general fund budget, and in a decade have gone from […]
Early Monday morning Cyprus’ leaders reached a deal with the EU, the European Central Bank and the International Monetary Fund. Cypriot bank accounts exceeding €100,000 will be taxed (at around or less than 30 percent). In exchange for the move, Cyprus will receive €10 billion from the EU. And the island’s second largest bank, Cyprus Popular Bank (also known as Laiki […]
After the Cypriot Parliament struck down the EU-proposal to levy a tax on Cypriot bank depositors as part of a bank bailout deal, Cyprus’ finance minister moved to plan B: ask Russia for help. Russian investors have sunk significant amounts of money into Cypriot banks due to lax money-laundering laws, and it would seem that […]
A taxi driver in Cyprus describes it as “a lightening bolt out of nowhere.” This weekend, the Mediterranean island nation announced that individual bank account deposits are in the crosshairs of an EU bailout plan. According to a deal negotiated with EU members, Cyprus must raise $7.5 billion in exchange for $13 billion in German […]
One outcome of the Supreme Court’s June 2012 health care ruling is that the federal government cannot force states to expand Medicaid. And yet, as of last week, 24 states have volunteered to do so. What is driving some states to expand a program that is a perennial source of budgetary pressure? In a new […]
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