Check this out: CNN Report on Cash Strapped Cities. Pay attention to Corey Booker’s thoughts on not only budget shortfalls but the unfunded pension and healthcare liabilities. This is HIGHLY relevant to New Haven.
Archive for the ‘Debt Obligations’ Category
Cash Strapped Cities
Saturday, December 11th, 2010Unfunded Pension Obligations
Tuesday, June 15th, 2010Check out this article in CT News Junkie on Unfunded Pension Obligations
An important piece this article does not mention is the “discount rate” or “Return on Investment” assumptions. When you assume, as New Haven does, a high and unrealistic 8-9% return every year, year after year, you only need to put in a small amount of money AND you can claim that we are “funding the pensions at 100% actuarial required amount”. The problem, is that if you assume 5% then the amount we need to put away in our CERF and P&F funds would skyrocket each year. Our funded ratio is very low AND we assume a high rate of return. I would recommend you request from our actuaries SEVERAL scenarios with the rate of return, pessimistic/ best guess/ optimistic ROI. Our current ROI is hopelessly optimistic and concealing the true problem in our city’s pension funds.
An Inconvenient Budget
Sunday, April 11th, 2010NPR Covers Pension Shortfalls
Sunday, March 21st, 2010Pension Woes May Deepen Financial Crisis For States
There’s a looming U.S. financial problem that’s big, is getting larger and could threaten the solvency of some states. From Connecticut to California, pension funds for teachers, firefighters and other public employees are severely underfunded. Read More Or Listen to Coverage
Blue Ribbon Budget Panel Reports to BOA
Tuesday, June 30th, 2009The final recommendations to the New Haven Board of Aldermen from the Blue Ribbon Citizen’s Panel on the Budget is ready. Its a worthwhile read. Thanks to all the panelists and city staff that contributed to its construction.
Why the City Can’t Hope For Its Own Bailout…
Wednesday, November 12th, 2008Check out this Government Accountability Office (GAO) video summary of the economy. This is before the latest meltdown and bailouts. Did you know you owe the US Govt $350,000?
Mayor On Financial Problems
Wednesday, October 22nd, 2008Although this letter from the Mayor focuses on the national financial mess, New Haven’s financial problems have been years in the making. This was coming to a head without the latest national pressures. What is happening, is now, these issues can no longer be managed with one time revenue infusions from selling City assets, or other financial engineering. We have written elsewhere, and provided testimony, that the budget is mostly personnel related. That is why the Mayor’s letter focuses on union renegotiations. Tweed, Shubert, the trolley to nowhere, and other major ticket items still pale in comparison to the major driver – personnel cost. This is simply a fact of the city budget. The fact that the city employees and the citizens still do not understand this is a failure of leadership on this issue. We need transparent government, multi-year financial projections to make sound decisions, and accountability at all levels of city government and city spending if we want to start digging our way slowly out of this hole. I am hopeful that the current administration will take the necessary steps to greater transparency, community involvement, and encourage honest and rigorous discourse on the financial state of this City so we can begin coming together to right this ship. Have some ideas? Send them our way.
Is New Haven Insolvent?
Monday, June 23rd, 2008According to Andy Ross, the City of New Haven is insolvent (unable to pay its debts). We have resorted to “financial engineering” to make our budget work (like borrowing from one credit card to pay another one’s monthly minimum payment). Read his informative article from the Grand News.
Contact your alderperson
to ask them about this article. We sent them all a copy of the article.
Bankruptcy In Our Future?
Thursday, May 8th, 2008See below for a NYTimes article and Harry David’s contextualization.
Note the size of Vallejo — 115,000 compared to New Haven/s 120,000. Vallejo’s payroll costs were 80% of the General Fund compared to New Haven’s 65%. New Haven’s Mayor will be proposing some modest payroll trimming that may not be sufficient. We have the experience of Waterbury to look to and to try to avoid going down the path of profligate spending in a constrained tax climate. Harry
US | May 8, 2008
City Council in Bay Area Declares Bankruptcy
By JESSE McKINLEY
The unanimous vote was cast after efforts to squeeze concessions out of Vallejo City employees failed and with the city facing a $16 million shortfall for the fiscal year.
