Another reason why California is doomed. Los Angeles Times: “The state of California’s real unfunded pension debt clocks in at more than $500 billion, nearly eight times greater than officially reported. That’s the finding from a study released Monday by Stanford University’s public policy program, confirming a recent report with similar, stunning findings from Northwestern University and the University of Chicago.”
The Arizona Republic reports that Mesa, Arizona, lost its state transportation funding and now faces a transportation deficit of $1.3 million. Mesa will be forced to cut bus and dial a ride services. Federal law requires cities to provide dial a ride services to disabled people within five miles of fixed bus routes for not more than two times bus fares. For Mesa, this unfunded federal mandate means that Mesa must pay $33.75 for every dial a ride passenger for which it collects $3 from the passenger. Mesa’s total federally mandated dial a ride cost is $4 million a year. I note that the story does not say that Mesa will cut any funding to its share of the cost for the highly favored, lightly used additional money pit known as the light rail.
Arizona Republic: “A group representing Arizona hospitals is pursuing a ballot initiative that would tax the state’s high-income earners to help pay the health-care tab for the state’s neediest kids and adults. . . . It asks voters to raise the state income-tax rate 1 percentage point on income exceeding $150,000 per individual and $300,000 per couple.”
Arizona Republic: “Epic budget cuts didn’t stop hundreds of Maricopa County employees from receiving pay raises over the past year. According to an Arizona Republic analysis of payroll data, about 500 employees were paid more money this fiscal year compared with last, even as the Board of Supervisors had suspended pay hikes because of the sour economy.”
Fron an editorial in the Chicago Tribune: “With federal budget deficits running wild, investors are growing uneasy at the idea of lending money to an institution that seems unable to stop spending beyond its means. Last month, something extraordinary happened: Two-year bonds offered by Berkshire Hathaway Inc. commanded lower yields than those offered by the U.S. government. As Bloomberg.com put it, ‘The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama’.”