State News Roundup
The State reports that South Carolina’s retirement system has now run a deficit of $1.4 billion dollars in just one year. Currently covering almost 500,000 people, the system includes state employees, local government workers and teachers. Following a pay freeze since 2007, take home pay being reduced due to furlough days, and increased health insurance premiums, many of the states public employees are not happy about a proposal to save $2.2 billion in the systems $14.4 billion dollar debt by decreasing benefits. Overall the increase in the deficit will cost South Carolinas $239 million a year to bail out the state starting July 1st.
In Los Angeles, Mayor Villarigosa is turning to voters to extend an increase in sales tax indefinitely. The Tax was added 4 years ago to raise capital for the Mayor’s vision of extending rail services for the traffic clogged city, but without an indefinite tax the city cannot borrow the $8 billion needed to fund an accelerated contraction plan for the project. To raise that money over time, the city would have to borrow against roughly 50 years of tax revenue says the Los Angles Times.
Following the adoption of a state sponsored fiscal board designed to bring the cities finances back to stable ground, Detroit seems to be losing more in revenue than anticipated. But, spending continues to increase as the city struggles to avoid bankruptcy reports The Detroit News. Across the board drops in revenue, with income taxes dropping as much as 18%, have made matters worse for the struggling economy. Fueling the drop is a mass exodus of residents from the city, 200,000 since the year 2000. To compensate this massive drop in population the city had previously passed unique revenue streams, such as a 5% utility tax, but now those revenue streams seem to not be enough. Facing tough fiscal decisions, Deputy Mayor Kirk Lewis says, “ The administration is focusing on reductions, consolidation and process improvements to generate savings.”