This thread is to document all the shitty state, county, and municipal governments which spent wastefully during the boom years and who are now enjoying the chickens coming home to roost.
Hoboken's 47% Tax Rise Sparks Exodus Talk in Manhattan Option Email | Print | A A A By Terrence Dopp Dec. 1 (Bloomberg) -- The blue property tax statement Andrew Sapira received in the mail last month from Hoboken, New Jersey, has him questioning whether the city billed as a lower-cost alternative to Manhattan is worth it. A state monitor, installed after city leaders failed to agree on a budget, ordered a 47 percent increase in property taxes for the 40,000-population community across the river from Wall Street, widely known from its portrayal as a blue-collar shipping port in the Oscar-winning 1954 film ``On the Waterfront,'' starring Marlon Brando. Payment is due today. Sapira, a 40-year-old doctor who lives in a four- bedroom brownstone on Garden Street, said his annual tax bill for city, county and school services will jump to about $21,000 from $16,000. The married father of two says he may have to move from the city he loves for its restaurants, night life and proximity to New York. ``That's a shame, because it's great here,'' Sapira said outside the tax collector's office in city hall last week after making a payment. Hoboken, cited in a Business Week and PolicyMap.Com study in September as among communities most vulnerable to a Wall Street decline, is a favorite of young professionals. One-third of residents were 25 to 34 years old in 2000, compared with 14 percent for New Jersey, according to the city's master plan. New Developments Renovated brownstones and new construction within the city's one square mile (2.6 square kilometers) boundaries have drawn the rich and famous, including Governor Jon Corzine and New York Giants quarterback Eli Manning. The Maxwell Place waterfront development the governor calls home markets three-bedroom units for more than $1.1 million. The property tax increase hits citizens at a time when New Jersey's unemployment rate is at a six-year high and with 60 percent of residents telling Quinnipiac University pollsters last month that they are financially worse off than a year ago. ``Businesses are having a hard enough time with the downturn; this is salt in the wounds,'' said Stephen Kilnisan, 58, who owns Traders of Babylon Fine Jewelers at First Street and Willow Avenue and will pay $4,000 more to the city this year. ``The timing couldn't have been worse,'' he said. The new rates put Hoboken above the average in New Jersey, which had the highest such levies in the country last year. City residents paid an average $5,780 in property taxes in 2007, compared with $6,796 statewide, which was 5.4 percent higher than 2006 as local governments raised their take to cope with less state aid. Political Squabbles Discontent is widespread, according to Sapira. ``I blame everyone,'' he said. Hoboken's finances suffered from political squabbles between the mayor and nine-member council even as the city boomed. New Jersey's local finance board placed Hoboken under state supervision in September after the city missed a deadline for passing a budget for a seventh straight year. State monitor Judith Tripodi proposed a $120 million budget for the year that began July 1, up from $93 million in fiscal 2008. The higher amount equals about $3,000 per resident. New Brunswick, a city of 50,000 in central New Jersey that is home to Rutgers University, has a budget of $72 million, or $1,449 per resident. The total amount to be raised by municipal taxes in Hoboken surged to $62 million from almost $34 million. Increases Avoided Mayor David Roberts, a second-term Democrat whose term expires next year, said that since he took office seven years ago, taxable real estate within Hoboken's borders swelled to more than $10 billion from $2.8 billion. The city has avoided ``substantial'' tax increases for 16 years, Roberts said, instead using ``one-shot'' revenue items such as selling city assets to balance budgets. Roberts, 52, blamed the council for not amending and passing his spending plan by the start of the fiscal year. ``The citizens of the city are angry at everyone; they're angry at all the bickering and the grandstanding that has taken place,'' Roberts said. ``They feel that because of all the political bickering, they're being punished. And I can't say I disagree with that.'' Councilman Peter Cammarano, 31, said Roberts allowed $10 million more in expenditures than what the council approved in the last fiscal year and provided no suggestions for closing the gap, prompting the budget stalemate. Roberts has said the spending was beyond his control. Angry Constituents ``You're talking about blunt force trauma,'' Cammarano said. ``People are getting hit at the worst possible time and people are already concerned about the largest asset on their books, which is their home.'' Cammarano said he will pay $250 more each month to his mortgage company, which handles taxes as part of servicing his loan. While the increase, which he likens to ``a small car payment,'' is too much, too fast, there's no option other than to pay, he said. Property owners aren't the only ones hit by higher taxes, said Nicholas Petruzzelli, a Hoboken Realtor and developer. As many as 60 percent of city residents are renters who will feel the sting as landlords pass on the increase in taxes. Renters' Pain Jen Areneo and her husband, who rent a three-bedroom apartment in Hoboken, said the higher taxes will affect the size of the mortgage they can afford when they buy their own place. ``I'm as furious as everyone else,'' Areneo, 31, said as she and a friend watched their children in a playground at Church Square Park. Corzine, a former Goldman, Sachs & Co. chairman, answering reporters' questions last week during a stop in Jersey City, said he would tell Hoboken residents ``that we are trying to work with them, that we are trying to reduce the rate of growth of property taxes or even try to level them.'' To contact the reporter on this story: Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net. Last Updated: December 1, 2008 00:01 EST http://www.bloomberg.com/apps/news?pid=20601109&sid=alN8vLMnAuoY&refer=home
Associated Press Florida pension fund loses a quarter its value By BILL KACZOR , 11.18.08, 07:57 AM EST pic Florida's public employee pension plan has lost more than a quarter of its peak value, but Gov. Charlie Crist and other officials Monday said the fund is built for the long haul and there's no need to panic. They said Florida has fared no worse than most big investors - a bit better than some major Wall Street indicators - due to slumps in the stock market, real estate and other segments of the national and world economies. The fund, which covers state and local government employees including teachers, lost $37.9 billion - 27 percent - over 13 months through Oct. 31, said Dennis MacKee, spokesman for the State Board of Administration. That dropped its value to $100.5 billion. The three-member board chaired by Crist manages 34 public funds totaling $125.4 billion, including investments for the Lottery, the state's hurricane catastrophe fund and local governments. The largest by far, though, is the retirement plan covering almost 1 million public employees, retirees and their families. "All funds are down all over the country, let's face it," Crist said. "Florida's a lot better off than most." The other board members are Attorney General Bill McCollum and Chief Financial Officer Alex Sink. "No need to panic with this at all," McCollum said. "We should expect to be where we are now and we should expect as the market recovers so will this fund, and handsomely so." The plan has benefited from the long-term, diversified approach Florida has taken, Sink said in a statement. "The current global financial downturn has affected everyone," she said. "Floridians should be confident that the SBA is one of the top-rated public pension funds in the country." An annual assessment in June showed the pension fund was worth 7 percent more than the level it would need to fully cover everyone entitled to a pension. It was one of only about a half-dozen public retirement systems on the positive side nationally. "A vast, vast, vast majority were below 100 percent," MacKee said. "We're in an enviable position." Richard Ferlauto, national director of corporate governance and pension investment for the American Federation of State County and Municipal Employees, agreed. "We believe in the long run they are in a position to recover," Ferlauto said in a telephone interview from Washington, D.C. It may take three or four years, though. Florida historically has earned about 10 percent annually on its pension fund investments, significantly higher than the national benchmark of 7 percent to 8 percent, Ferlauto said. He said Florida has been in better shape than most states because it has been strict in requiring state and local agencies to make regular contributions. McCollum said the board reduced its exposure to common stocks and other equities in spring 2007, preventing the current losses from being even greater. Most of the decline has come over the last three months. The pension fund's value dropped by 19 percent since June, MacKee said. He said that compares to 23.8 percent for Standard & Poor's index of 500 major companies and 24.9 percent for the Russell 3000 Index. While public employee union officials acknowledge the fund has been well-managed, they are pushing for representation on its investment advisory committee. They also want the board to be more transparent. "I'm glad that they've come out with some information on this," said Mark Pudlow, spokesman for the Florida Education Association, the statewide teachers union. "It's a tremendous concern for us." The board has been more open since Coleman Stipanovich resigned as executive director last December, said AFSCME spokesman Doug Martin. Stipanovich stepped down amid a run on the board's local government investment pool. Cities, counties and other local agencies withdrew billions because part of the fund had been invested in mortgage-backed securities that lost nearly all their value. The pool has shrunk from $27.3 billion to $6.1 billion due mostly to the withdrawals plus the market slump. That $21.2 billion decline has contributed to an overall one-third drop in the value of the board's investments by $62 billion in the past 13 months. Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed http://www.forbes.com/feeds/ap/2008/11/18/ap5707528.html
Budget Group: IL Pensions May Be Underfunded by $50-Billion Produced by Adriene Hill on Monday, November 24, 2008 Illinoisâ unfunded pension liability may be as high as 50 Billion dollars. Thatâs according to the head of a local budget watchdog group. The financial markets have taken a toll on Illinoisâ pension programs. Lawrence Msall is the head of the Civic Federation. MSALL: Weâre hearing projections of losses in excess of 20 percent or more. And they were already dramatically underfunded to the tune of about 43 billion. So we believe that weâll be passing the 50 billion mark. Thatâs larger than the stateâs annual budget. Illinois pensions arenât alone in feeling the burden of the financial market meltdown. According to the Center for Retirement Research at Boston College, state and local pension programs nationwide lost one trillion dollars from October 2007 to October 2008. http://www.wbez.org/Content.aspx?audioID=30373
Schwarzenegger calls new special budget session Mon Dec 1, 2008 8:25pm EST SAN FRANCISCO (Reuters) - California Gov. Arnold Schwarzenegger declared a fiscal emergency on Monday to call lawmakers into a special session to focus on a swelling state budget gap just days after another special session failed to close the shortfall. California's celebrity Republican governor also said he would travel to Philadelphia to meet with Democratic President-elect Barack Obama to urge him to focus on public works to jump-start the economy. "We have right now $26 billion of infrastructure projects ready to go, so that when he becomes president we literally can go and take federal money and go to work and start working on those $26 billion worth of projects," Schwarzenegger said at a media event in Los Angeles. "So we want to talk about that, because if we do that and if we get federal money to build this infrastructure, that will put tens of thousands of people to work," he added. Schwarzenegger said he would lobby for public-private partnerships to build infrastructure because government coffers are under too much strain to bear the cost of public works alone. At the same time, Schwarzenegger urged new lawmakers sworn in on Monday to rally to his plan for closing California's budget shortfall, estimated to grow to $28 billion over the next 18 months. California's budget routinely tips into a deficit -- a major reason the state's general obligation debt rating is paired with Louisiana's at the bottom of Wall Street's state rankings -- but the scale of its shortfall in the weakening economy has heightened concerns among state officials and investors. The finances of the most populous U.S. state, also the biggest issuer of U.S. public debt, have suffered from sagging revenues amid rising unemployment, sluggish retail activity and turmoil in financial markets, and economists do not expect a rebound any time soon. Schwarzenegger has proposed California balance its books with a combination of spending cuts and new revenues, including revenues from raising the state's sales tax for three years and from a severance tax on oil production in his state. Democrats who control the state legislature routinely oppose spending cuts and minority Republicans have enough votes to block budget and tax bills, resulting in long and often bitter battles before agreement on spending plans. California can no longer afford that kind of partisanship over its finances, Schwarzenegger said. "I compare the situation that we are in right now to finding an accident victim on the side of the road that is bleeding to death," Schwarzenegger said. "We wouldn't spend hours debating over which ambulance we should use, or which hospital we would use, or which treatment the patient needs. No, we would first stop the bleeding and that's exactly the same thing we have to do here." (Reporting by Jim Christie; Editing by Gary Hill) © Thomson Reuters 2008 All rights reserved http://www.reuters.com/article/domesticNews/idUSTRE4B10H020081202