State News Roundup

November 11, 2010

Last Friday, The Pittsburgh Post-Gazette detailed how Pittsburgh’s city pension faced fiscal problems greater than previously thought.  The Pittsburgh City Council is considering a state pension takeover, in which the city would pay approximately $3.6 billion over the next 30 years to get the pension plan 100 percent funded, according to a report by Pennsylvania Municipal Retirement System. Per the article, city officials have said the fund now is 27.5 percent funded. It must be 50 percent funded by Dec. 31 to avoid a takeover.

This past weekend the LA Times highlighted the empty pockets of California’s unemployment insurance fund.  California is borrowing a staggering $40 million each day from the federal government to pay unemployment benefits. Per the article, the fund’s debt, now at $8.6 billion, is expected to reach $10.3 billion for the year, two-thirds greater than last year. Worse, the deficit is projected to hit $13.4 billion by the end of next year, according to the California Employment Development Department, which runs the program.

On Monday, The Philadelphia Inquirer editorialized on New Jersey governor Chris Christie’s plans to use salary caps to limit the amount top school district administrators can be paid.  Per the editorial, the salary caps for administrators can be good news for students, if the $9.8 million saved annually as a result is pumped back into classrooms. Christie calls the steps “sanity.”

On Tuesday, The Cincinnati Enquirer reported the dilemma facing newly elected Ohio governor John Kasich. Kasich received a message from Washington: build trains or give back the $400 million in federal funds pledged to the state for rail projects, and perhaps funds for non-rail construction projects.  Ohio isn’t the only state receiving an ultimatum; Wisconsin ‘s governor–elect Scott Walker received the same message from Transportation Secretary Ray LaHood. It should be noted that both governors campaigned against the projects, which may gauge how the public feels on the construction of these rail projects.

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