Gay Patriot Header Image

State budget crises

These seem to be popping up. For decades, State public pensions have been under-funded and overly-generous. The bill is coming due. Bloomberg has a map:

Gray means nothing good. California, for example, has under-funded its pensions by $1 trillion – or $93,000 per household – which is worse than Illinois.

The big crisis of the moment is Illinois. They have not enacted a budget in 3 years, have $15 billion in unpaid bills, and a court just ordered them to make some large Medicaid payments they had been skipping. In consequence, the Democrat legislature has passed tax hikes – that the Republican governor has vowed to veto, at least for now.

Other states in crisis are

  • Connecticut, where the Democrat governor has signed an executive order to take control of State spending (and do service cuts) after the Democrat legislature couldn’t pass a budget.
  • Maine, where the Republican governor is threatening a government shutdown (and state of emergency) rather than accept another Democrat tax hike.

All of these States face downgrades of their bond ratings.

As to California: it already has some of the nation’s highest tax rates (13% top income, 7-10% sales taxes). With typical “progressive” insanity, CA is spinning on whether to do single-payer health care – a $400B idea that it can’t afford even today, and still less after California’s inevitable pension crisis hits.



  1. In the state of New Jersey, about half of all employed residents work for some form of governmental entity; federal, state, county, local government or agency, authority, university or the military. Which means they in-general don’t produce any wealth nor generate pre-tax revenues. Crudely (and unfairly) put, they are all “takers” and suck at the public teat.

    Is it any wonder the State is in financial trouble?

    Comment by Ted B. (Charging Rhino) — July 3, 2017 @ 4:54 pm - July 3, 2017

  2. Kansas has some big problems. Brownback’s supply-side cuts made the problem worse (I’m a supply-sider but there’s more to it than more cuts for “business”).

    The legislature rolled back some of the cuts and overrode Brownback’s veto so, hopefully, we’ll get lined out.

    The cuts would have made sense if current pension liabilities were funded AND state pensions were close to new employees. Give them a 401k with 50 percent match like most of the rest of us.

    A naturalized Jawhawk, I find KS reasonably well-managed and never thought myself overtaxed. While low taxes are a good thing, they’re not a cure-all and there is a point of diminishing returns.

    Comment by KCRob — July 3, 2017 @ 6:58 pm - July 3, 2017

  3. Obama was able to come up with nearly $1Trillion for bailing out the 2008 mess with shovel ready jobs which were going to put the economy on the fast track to recovery when all those road and bridge workers spent money at the 7-11 and blah, blah, blah.

    In my world, $1Trillion is a boatload of money. Especially after just spending another $1Trillion on the Paulson fiasco and bailing out Freddie, Fannie and Flipper.

    So, if I were a profligate state or Puerto Rico, I would gamble on Uncle Sugar just spinning out a bunch of fiat moolah to restore the “integrity” of my bankrupt state.

    All that said, the unfunded liabilities of the states are part of the national debt because there is no way to pretend that the sovereign obligations of We the People does not include what We the People do piecemeal state by state.

    Glenn Reynolds says he is all for a state declaring bankruptcy, but only if it immediately is forced to revert to territorial status and stays there until it heals itself and dares to write up a workable constitution and apply for statehood as if it had never had state status.

    Another suggestion is to divide Illinois up and add its territory to neighboring states of Michigan, Indiana, Kentucky, Missouri, Iowa and Wisconsin. I guess Wisconsin would get Chicago, so maybe Chicago could be set aside as an independent city like Washington, D.C. with no representation in Congress or the Electoral College. Seems about right.

    Comment by Heliotrope — July 3, 2017 @ 9:05 pm - July 3, 2017

  4. Like the imperial free cities of the Holy Roman Empire, if Federal cities received one Senator and their own Congressional representation how many major metropolitan cities would take the deal and secede from their respective states? Or state legislators would vote to expell their troublesome urban burdens?

    It would eliminate many upstate-downstate political conflicts, and the problem of Washington DC’s residents Federal status.

    Comment by Ted B. (Charging Rhino) — July 4, 2017 @ 3:31 am - July 4, 2017

  5. The great budget crisis of 2017 for the State of Maine is over. The dire Progressive predictions of the poor and elderly dying in the streets never materialized. Shocking. The 3 day (one business) day shut down did not throw thousands of state workers out on the streets and into poor farms.

    It seems Governor LePage is taking a page from Trump’s playbook and setting the Progressives up to look like 4 year olds throwing temper tantrums. If so, well played.

    Comment by tnnsne1 — July 4, 2017 @ 9:48 am - July 4, 2017

  6. So…… states are running out of other (often un/under employed) people’s money to pay their bloated bureaucracies comfy retirement that’s rarely available in the private sector any more. Who’d a thunk it?

    Comment by Rex — July 4, 2017 @ 12:59 pm - July 4, 2017

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.