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Food For Though on State & Local Government Finances: Union Pensions Destroying New York -- “the state is functionally bankrupt"

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Food For Though on State & Local Government Finances: Union Pensions Destroying New York -- “the state is functionally bankrupt"

June 02, 2010 - 21:12

There is no way around it. Weak-willed, money-grubbing politicians, desperate for the money and foot-soldiers unions bring to campaigns have conspired with the leaders of public employee unions to bring the State of New York to its knees -- and things are projected to get worse next year.

CNBC/Reuters: NY Nearly Goes Broke Again, Delays Paying Bills

New York state delayed paying $2.5 billion of bills as a short-term way of staying solvent but its cash crunch could get even worse in August and September, Budget Director Robert Megna said on Tuesday. "Had we not done that, I think we would have been close to broke," Megna told reporters in Albany. This is the third time since December the cash-poor state has withheld funds.This time, the state's general fund, which counts everything but federal aid and some specific revenues, ran in the red by about $500 million to $600 million, Megna told reporters. The state was able, however, to borrow from other funds, including the short-term investment fund. About $1.5 billion of the withheld funds must be paid to schools in June. The rest of the total could be paid in July.

With Cuts Looming, New York City Agency Payroll Increased

Even as service cuts and layoffs loom, salaries at the agency that operates New York City's subways and buses have increased for the second year in a row....average pay at the Metropolitan Transportation Authority increased more than 2 percent in 2009. More than 10 percent of employees made at least $100,000. The average pay for an employee was just under $70,000. MTA spokesman Kevin Ortiz said the increase was due to raises already promised to unions. All managers had their pay frozen last year.

Padded Pensions Add to New York Fiscal Woes

...errors, misunderstandings and wishful thinking are piling hidden new costs onto New York’s public pension system every year, worsening the state’s current fiscal crisis. And the problem is not just in New York. Public pension costs are ballooning everywhere, throwing budgets out of whack and raising the question of whether venerable state pension systems are viable.vIn fact, the cost of public pensions has been systemically underestimated nationwide for more than two decades, say some analysts. By these estimates, state and local officials have promised $5 trillion worth of benefits while thinking they were committing taxpayers to roughly half that amount.

Wall Street Journal: New York Is Almost Out of Cash

On June 1, New York is due to send $3.8 billion in aid to local school districts, including $2.1 billion that was supposed to be paid in March but not sent for lack of funds. Yet New York is still $1 billion short. This could affect school operations, the solvency of any business that sells goods or services to the state, the paychecks of state workers, and ultimately home values.

Washington Post: A tale of two counties

Montgomery (county, near DC) is lurching under the weight of irresponsible governance, unsustainable commitments and political spinelessness -- particularly in the face of politically powerful public employees unions...when 80 percent of all outlays are related to personnel, labor contracts that get out of whack can endanger the public welfare.

New York Times: Cuomo to Propose Eliminating Many State Agencies

Attorney General Andrew M. Cuomo will seek to eliminate 20 percent of New York’s agencies, commissions, authorities and other bodies if he is elected governor, according to a campaign report obtained by The New York Times as he prepares to announce his candidacy...Legislative approval is currently required to eliminate any state agency or public authority.