Minnesota's move to raise $2.1 billion in new taxes, largely from the wealthy, to fund government programs puts it among a handful of states controlled by Democrats that are adopting more liberal fiscal policies at a time when many Republican-dominated statehouses are pushing to cut taxes.

During a press conference this morning to tout his latest state budget plan, Gov. Jerry Brown said that he wants to hold down state payroll costs as his administration bargains new pacts with nearly a dozen unions.

The Democratic governor, who has pledged to maintain fiscal restraint and build a cash reserve, faces pent-up pressure from members of his own party. Democratic lawmakers want to spend the additional revenue to make up for years of budget cuts to programs serving women, children and the poor.

Even as lawmakers were reining in the use of "capital-appreciation bonds" -- which became notorious when one San Diego-area district revealed that it was making a $1 billion interest payment on a $105 million debt -- the state Senate advanced an ill-defined new "bond" plan to provide schools with a fresh source of cash.

Because state funding is often deferred for months, charter schools must take out bridge loans to pay the bills. The interest costs come at the expense of pupils.

California taxpayers may see the municipal pension contributions they fund for the California Public Employees' Retirement System rise as much as 50 percent under a plan to fill $87 billion in unfunded obligations.

Read Bob Williams' statement on the court's decision permitting the city of Stockton, CA to file for bankruptcy protection. Find our coverage of municipal bankruptcy and how other CA cities have avoided bankruptcy.

Whether federal bankruptcy law trumps the California law that requires pension fund debts to be honored could have huge implications across the state and the rest of the nation, experts say.

The Chapter 9 bankruptcy case also is being closely watched nationally for the potential precedent-setting implications: whether federal bankruptcy law trumps the California law that says debts to the state pension fund must be honored.

The people of Stockton will feel financial fallout for years after a federal judge ruled Monday to let the city become the most populous in the nation to enter bankruptcy.

Were California's state government a business, it would be a candidate for insolvency with a negative net worth of $127.2 billion, according to an annual financial report issued by State Auditor Elaine Howle and the Bureau of State Audits.

Delays by the state in implementing higher Medi-Cal reimbursements could cost the Los Angeles Fire Department $15 million this year in both lost revenue and productivity gains, city officials were told Wednesday.

California taxpayers may see the municipal pension contributions they fund for the California Public Employees' Retirement System rise as much as 50 percent under a plan to fill $87 billion in unfunded obligations.

Whether federal bankruptcy law trumps the California law that requires pension fund debts to be honored could have huge implications across the state and the rest of the nation, experts say.

This paper examines the ongoing fiscal crisis caused by health-care plans for retirees (known as "other post-employment benefits," or OPEB) in one of the hardest-hit states, California, and outlines necessary reforms that should come before tax increases or cuts to government services.

In June 2012, nearly 70% of San Jose voters approved "Measure B" - a set of pension reforms that the City Council placed on the ballot after more than 8 months of negotiations with our employee unions.

Document that outlines ten steps to return California to prosperity.

Proposals to tax Internet retail sales are all the rage as states continue to look for more ways to balance their budgets in the face of revenue shortfalls.

Detailing how the state's public pension system broke and how to fix it.

Article explaining that if spending on state bonds could be suspended for a year, $5.45 billion could be sliced from that $20 billion deficit and arguing that special itnerests should not be permitted to put bonds on the ballot.

Paper suggesting a variety of ways to fixing state budgets in crisis, including freezing or slowing public employee salary growth, privatizing infrastructure and state operations, eliminating prevailing wage and placing constitutional limits on taxing and spending.

The unions' political triumphs have molded a California in which government workers thrive at the expense of a struggling private sector. The state's public school teachers are the highest-paid in the nation. Its prison guards can easily earn six-figure salaries. State workers routinely retire at 55 with pensions higher than their base pay for most of their working life. Meanwhile, what was once the most prosperous state now suffers from an unemployment rate far steeper than the nation's and a flood of firms and jobs escaping high taxes and stifling regulations. This toxic combination-high public-sector employee costs and sagging economic fortunes-has produced recurring budget crises in Sacramento and in virtually every municipality in the state.

Paper arguing for an alternate form of fiscal discipline, known as Budgeting for Outcomes (BFO), which combines strategic planning, zero-based budgeting and performance budgeting in a workable, common-sense package.. BFO would help the governor and/or legislature, in California as it has in other states, build the budget in a way that delivers the results citizens want at a price they are willing to pay.

With a correctional system strained by severe overcrowding, a state fiscal crisis and a recent federal order to reduce the prison population by over 40,000 inmates, there are no silver bullet solutions to California's prison crisis, but this paper presents the option of a public-private partnership to lower prison operating costs and deliver additional inmate beds to address the severe overcrowding.

California taxpayers may see the municipal pension contributions they fund for the California Public Employees' Retirement System rise as much as 50 percent under a plan to fill $87 billion in unfunded obligations.

Whether federal bankruptcy law trumps the California law that requires pension fund debts to be honored could have huge implications across the state and the rest of the nation, experts say.

The Chapter 9 bankruptcy case also is being closely watched nationally for the potential precedent-setting implications: whether federal bankruptcy law trumps the California law that says debts to the state pension fund must be honored.

The federal investigation has been probing alleged influence-pedding in winning lucrative contracts for private equity funds that wanted to do business with CalPERS, the country's largest public pension fund.

The California Public Employees' Retirement System's board voted to divest its $5 million in shares of Smith & Wesson Holding Corp. and Sturm Ruger & Co. because the companies make weapons banned in the state.

The state's attorney general, Kamala Harris, sued rating agency Standard & Poor's on Tuesday, blaming S&P for a total of $1.36 billion in losses sustained by CalPERS and the state's other big pension fund, CalSTRS.

On the longer-term obligations, the state has not begun to save toward obligations for future retirees as some cities such as San Diego have begun to do.

Reports have estimated California’s unfunded public pension liability somewhere between $400 and $500 billion dollars. The California Public Employees’ Retirement System’s (CalPERS) latest Comprehensive Annual Financial Report for fiscal year 2012 shows the extent to which the state’s pension problem continues to grow. 

San Bernardino and the California Public Employees' Retirement System will ask a judge today to decide the legality of the city's decision to defer about $13 million in pension payments for policemen, firefighters and street cleaners.

Public pension funds must invest wisely, pay promised benefits and operate transparently. That often smacks squarely into how their business partners operate.

Time to add a new diagram to the state budget and policy playbook--your state's highest paid employee is probably a football or basketball coach.

The bombshell Oregon Medicaid study released this week should give all states pause as they consider plans to expand Medicaid under the Affordable Care Act. States must now ask what the point of Medicaid is in the first place. 

Several Western states are struggling with how to react to the mineral lease and royalty paymentsequestration cuts by the federal Department of the Interior. But there is an argument to be made that states should not be in this position in the first place.

California lawmakers from both parties are concerned by the past rushing of legislation and a result they are asking voters to pass a state constitutional amendment requiring all bills to be in print and online for 72 hours before final passage

To help prevent union strong-arming that fleeces taxpayers, we should know precisely what public union officials are demanding and what government employers are offering in any collective negotiation about employment terms and conditions.

And it isn’t just individuals who must reconfigure budgets, the states are looking at smaller “paychecks” as well.

Just as state spending should identify performance outcomes, tax preferences should as well.

Reports have estimated California’s unfunded public pension liability somewhere between $400 and $500 billion dollars. The California Public Employees’ Retirement System’s (CalPERS) latest Comprehensive Annual Financial Report for fiscal year 2012 shows the extent to which the state’s pension problem continues to grow. 

State and local politicians may think they can relax as third quarter tax revenues showed 12 consecutive quarters of growth year over year. But that would be a mistake in light of pension investments that again failed to erase any of more than $5 trillion owed to government workers.

Selling tax hikes as a "temporary" budget solution is hardly a new tactic for government officials. Just give the state a bit more for a little longer, they say, and the brighter budget future just around the corner will finally arrive. Such was the case when Washington State temporarily tripled its tax on beer.

This map looks at state government budgets - specifically, how much of each state's budget comes from the federal government. Mississippi tops the list with 49% of its general revenue coming from Washington; Alaska, by contrast, gets only 24% of its general revenue from the feds.

A National Insistute on Retirement Security brief on proposals to freeze local and state defined benefit pension plans in a shift to defined contribution plans that limit taxpayer risk ignores is what protections are needed against endemic public pension corruption and offers no explanation of who is going to sacrifice to pay this massive hidden debt.

The "State of the States" report released this week puts hidden state and local debt at $7.3 trillion, stating: "States do not account to citizens in ways that are transparent, timely or accessible." If state and local governments fail to act decisively now, cities, towns and counties will go bankrupt, and states could fall beyond a fiscal event horizon into perpetual debt.

The U.S. Census Bureau today released its Annual Survey of State Government Finances for 2011, and it shows the "revenue crisis" politicians have been blaming on the Great Recession is false.

From Fiscal Years 2007 through 2011, politicians and government pension fund managers blew all the money taxpayers and government workers contributed. All of the $611 billion that was supposed to be invested is gone. So is the $609 billion earned on investments. According to the latest U.S. Census Bureau Annual Survey of Public Pensions: State-and-Locally-Administered Defined Benefit Data, more than $1.22 trillion came in to the pension plans and more than $1.29 trillion went out instead of growing to pay guaranteed future benefits. Those promised benefits grew by about $1 trillion over the same period. 

Members of a state and municipal workers organization recently got a dose of reality on pension reform at a gathering of public workers who have benefited from defined contribution plans for 40 years. A key fact from the presentations was stated by Ken Parker, city manager of Port Orange, Florida: "Note: the only way a governmental entity can truly fix its cost related to retirement is to change from a Defined Benefit Plan and adopt a Defined Contribution Plan."

Of all accounting frauds state leaders commit to push devastating costs onto future generations, the worst is deluding citizens about the security of so-called catastrophe insurance funds. Hurricane Sandy and a tsunami scare in Hawaii at the same time should be warning enough for governors to start paying the premiums.

Under Mayor Chuck Reed's leadership, the city of San Jose, California has transformed into a model for other cities and states teetering at a fiscal cliff.Under Mayor Chuck Reed's leadership, the city of San Jose, California has transformed into a model for other cities and states teetering at a fiscal cliff.

When a "premier global consulting and actuarial" firm proves in its first Public Pension Funding study that those government pensions are doomed, it is past time for action. Milliman's study showing a 33 percent increase in pension debt over official numbers from a minute change in accounting should be enough to spur reform.

No matter what the Government Accounting Standards Board says or how grossly state and local politicians pervert new guidelines to continue looting workers' pension funds, reality will triumph when the real reckoning comes. Just ask the National Association of Bond Lawyers, municipal bond rating agencies and actuaries who do the calculations.

Anyone interested in the state and local government pension crisis - and all Americans should pay attention to this hidden $4.6 trillion hidden black hole in our economy - must read Alicia H. Munnell's new book, "State and Local Pensions: What now?" It is the best primer on this complex issue except for one missing factor: Reality.

When a widely recognized world pension expert refers to current defined benefit and defined contribution plans as "dysfunctional," it is time for politicians to stop their lying and denying that this fiscal catastrophe is spiraling out of control.

When State Budget Solutions started looking at real total state debt, just the staggering size of the numbers alone did not tell the whole story. So how to get a fix on the real burden taxpayers must bear in each state? Per capita is the usual way. But even that does not tell the whole story.

Anyone who thinks entrusting even more money in a Secure Choice "partnership between the private sector and public sector to provide lifetime retirement security for all" should check the public sector history of stewardship.

The worst news is that earnings on investments were a negative $14.2 billion, a $66 billion decline from the same quarter last year. These pension funds paid out $53.4 billion in the second quarter, putting a year-over-year hole of at least $68 billion in capacity to pay future benefits.

If current state and municipal workers and retirees refuse to accept their fair share of sacrifice on retirement benefits, the looming taxpayer backlash will sweep away a century of progress. Workers must act voluntarily now because politics and law never will resolve this crisis before the money runs out, and legal protections they are counting on may be as false as politicians' promises.

“This is the most far-reaching pension reform in the history of California,” said Governor Jerry Brown to reporters before the legislature voted to approve AB340 last week. Turns out, the bar to be considered “far-reaching” in California is staggeringly low.

Maryland Gov. Martin O'Malley told Democratic faithful gathered at the national convention Tuesday that "Democratic governors are balancing budgets," when he knows that is a lie, especially in the Old Line State. Twenty Democratic governors account for about 53 percent of total state debt, according to a study released last week by State Budget Solutions.

Vice presidential candidate Rep. Paul Ryan of Wisconsin and New Jersey Gov. Chris Christie put on cheery faces for the faithful this week at the Republic National convention, but both know the catastrophe states are hurtling toward because of hidden debt.

They just keep on letting politicians pick their pockets. Latest official public pension data - the most optimistic available -- compiled by Census show investments administered by states fell short more than $1.2 trillion even by their own trick accounting from Fiscal Year 2007 through 2011. Yet managers scraped off at least $45 billion in "Other Payments" to enrich a handful of insiders.

"Unsustainable" is the word state officials heard from experts for the first time at their annual National Conference of State Legislatures gathering here, where one of four sessions on the pension crisis drew a standing-room only crowd of more than 300.

When U.S. Sen. Dick Durbin of Illinois tried to fire up a ballroom full of state legislators here Tuesday morning, he used the phrase "states rights." It popped up a few other times as the National Conference of State Legislatures met to its annual "Build Strong States" summit. The only problem: There is no such thing as "states rights."

We're going to pay enough for 2,000 "Curiosity" Mars rover missions, but the money will produce no government services or benefits of any kind. Yet, nowhere does a state legislative directive on pensions approved Tuesday mention how states are going to pay this debt.

National Conference of State Legislatures members meeting here ended their first day with even more bad news about municipal bonds, debt interest that takes more than 20 cents of every dollar they spend each year and that pays for essential public works, among other things.

The word "taxpayer" appears only 14 times in 165 pages of the Securities and Exchange Commission's Report on the Municipal Securities Market released Tuesday. Only two of those mentions in the body of the report refer to looking out for our interests.

While access to a pension fund's financial report usually takes a minimum amount of effort to locate a copy through Google, Nevada takes a unique approach that complicates research.

It initally seems that the money was lost, as opposed to purposefully hidden, indicating a gross number of foolish mistakes. 

Question: When does 80 percent of something equal 100 percent? Answer: Never, except in the fantasy world of public pension accounting. The American Academy of Actuaries Tuesday sent a letter to Sen. Orrin Hatch, R-Utah, puncturing that fantasy in a committee report he released six months ago.

Push past the spin. Most public workers covered by defined benefit pension plans - and taxpayers stuck with the tab - don't have to wait years to find out what's happening to their money. They can get quarterly reports from the Top 100 funds representing 89.4 percent of "financial activity."

If our states and municipalities were trauma victims, they would be bleeding out while doctors argued about injuries. Even as financial gurus Paul Volcker and Richard Ravitch studied the municipal and state fiscal crisis for a report released this week, public pension debt alone grew to an untreatable $4.6 trillion, according to analysis released Wednesday by economist Andrew Biggs for State Budget Solutions.

Despite being approved with 66% of the vote, a California judge has delayed implementation of the reforms until at least July 27.

Anybody who doubts whether public pensions can push state and local governments beyond a fiscal event horizon into a black hole of perpetual debt should read an auditor's note in Montana's latest annual report: "The Unfunded Actuarial Accrued Liability amortization period is infinite ...."

It may be equally as worrisome to know that the Department of Labor is also engaging in the practice of publishing one set of rosier numbers, only to amend them to the real numbers days later, thereby avoiding dissemination of the worst numbers.

Public pensions just keep falling further and further behind. In fact, they have fallen so far they never can get up again. The local and state pension crisis got at least $300 billion worse in the first quarter of this year compared to 2011, according to analysis of latest data released by the U.S. Census Bureau. That added at least $1.5 trillion to the shortfall -- calculated at $800 billion to more than $4 trillion as of 2010 -- future taxpayers must make up on top of all other taxes and rate hikes.

Despite the obvious need for maintaining these funds, many state lawmakers deplete or insufficiently fund the reserves to cover costs elsewhere, leaving constituents to fend for themselves during bouts of extreme weather.

The new budget relies on crafty gimmicks that allow legislators to proudly announce a “balanced” budget without the difficult decision-making typically associated with governing.

California lawmakers created a 777-page $92 billion budget bill and gave their fellow legislators minimal time to read it.  Republican lawmakers boycotted Thursday's Senate Budget and Fiscal Review Committee meeting hearing, saying they were not given enough time to review. 

Now, 70 percent equals 100 percent. The people crashing municipal and state pension plans into a bottomless fiscal abyss just released a "study" they claim finds them "solidly funded" despite irredeemable losses in the recession and lagging growth since. They did it by lowering their standards. No problem, they expect taxpayers to make up the difference.

Maybe average Wisconsin voters didn't consciously know each household must pay $1,563 in extra taxes every year for the next 30 years just to fund public pension shortfalls. But they probably realized they don't have a pension anymore, even if they have jobs. And any lucky enough to have jobs know that before Scott Walker became governor, they were paying higher taxes while working harder and longer at lower pay with slashed benefits.

In a report released January 18, 2012, the Wisconsin Government Accountability Board studied cost estimates for the 2012 recall elections in all 72 counties, including 1,707 municipalities (92.3% responding). Although the costs may vary based on turnout rates, the G.A.B. estimates the total cost of the recall elections at $9,011,762.18.

Politicians are forcing public pensions to take more risks with taxpayer money and public workers' retirements. Recent accounting reforms actually will make the crisis worse, according to a study just released by three economists. They call for "drastic reform." Congress actually has the power to impose something drastic now.

This all boils down to who gets to pick taxpayers' pockets first, public pensioners or municipal bond investors? More people are waking up to the hard reality that when it comes to state and local government, somebody has to lose money over the next few decades. The National Association of Bond Lawyers is worried enough about it to issue "Considerations" for advising clients who think they're getting safe investments.

Despite an organized campaign to stop public pension reform, reality is beginning to break through.  One recent report outlines a possible path to long-term solutions and another details the necessity of states and municipalities finding their own way because federal bailout is impossible.  And Chicago Mayor Rahm Emanuel released a plan that could have been based on both reports.

Hey, young public employees, what are you going to do when your pension checks bounce after you paid in for decades? That is what will happen in many - maybe all - states and municipalities sooner or later if they do not reform right now. If you want to see the future, just look at Illinois. One citizen there did, and came up with a real reform plan that might work.

Public employees should take their pension money now and run to avoid risk of getting reduced benefits - or nothing - in the future. It's the best deal for them and for taxpayers. A growing chorus of credible voices including the Government Accountability Office, a Federal Reserve bank and now the Harvard Kennedy School Mossavar-Rahmani Center for Business and Government confirm state and local government finances are "spiraling out of control" and even draconian reforms only make it "more likely" that future benefits will paid in full.

Hey, young public employees, what are you going to do when your pension checks bounce after you paid in for decades? That is what will happen in many - maybe all - states and municipalities sooner or later if they do not reform right now. If you want to see the future, just look at Illinois. One citizen there did, and came up with a real reform plan that might work.

This is what it sounds like when the Federal Reserve Bank screams: "Much has been written about the various headwinds restraining economic activity over the near term. However, our economy also has other headwinds to confront over the medium- to-longer-term. ... the finances of some state and local governments are also under stress and in need of serious adjustments."  - Federal Reserve Bank of Cleveland President Sandra Pianalto

The new compromise, titled the "Schools and Local Public Safety Protection Act of 2012," pitches itself exclusively as a "Millionaire's Tax" despite retaining the aspects of Brown's original plan that would hit far more than California's top earners.

A string of recent high profile public official corruption cases have brought the topic of pension forfeiture to the debate roundtable.

The Los Angeles City Council's Budget and Finance Committee took its first step toward a performance-based budgeting system starting with the Planning Department and the Bureau of Street Lighting last Tuesday.

As state lawmakers struggle to close budget gaps and reduce deficits, many are scrambling to find new sources of revenue, often in the form of new taxes. To bolster revenue, states like Texas and Illinois are honing in on a new type of tax, a "skin" tax, aimed at strip clubs in the state.

On February 14^th, we celebrate love, family, and our partners. When it comes to celebrating partners, state governments have a number of Valentines. Because state governments continue to award the sweetest deals to their sweethearts, big business, they are never alone in love on Valentine's Day.

In the face of strong national consumer spending and private sector employment gains, State Controller John Chiang released California’s December financial statement showing the General Fund is running a staggering cash deficit of $21 billion on an $88.5 billion budget. This imploding financial condition is a reflection of how California’s high businesses taxes and excessive regulations are accelerating the trend of businesses abandoning the state.

The question since June has not been whether or not California would realize an extra $4 billion in revenue, thus avoiding a slate of automatically triggered budget cuts, but rather how much it would fall short.

Gov. Jerry Brown's Executive Order B-13-11 name-drops several reforms that could help implement this understanding, such as zero-based budgeting and performance measure implementation. But in sum, it seems like a way of treating separate symptoms instead of an overarching infection. In this way, it complements the sentiments expressed in Brown's performance-based budget veto message.

Unable to extend higher taxes in the 2011 legislative session, California Governor Jerry Brown is set to propose two new tax hiking measures for the November, 2012 ballot. The increases include both an extra half-cent on the sales tax as well as the income tax for individuals making over $250,000.

Facing $400 billion in unfunded pension liabilities, California Govenor Jerry Brown has laid out a 12 point proposal to reform the state's sytem.

Decision making is best informed when all options are on the table; in other words, when all spending priorities can be measured against one another as parts of a whole.

After reform unanimously passes the State Legislature, the future of California's budget process is up to Governor Jerry Brown.

California's leaders are having trouble choosing who will be hit with 2012 tax hiking ballot initiatives. 

A four-part series examining the cuts to higher education funding in California, and the simple ways in which the cuts could have been avoided or the pain minimized. If anyone had the guts to do so, of course.

A four-part series examining the cuts to higher education funding in California, and the simple ways in which the cuts could have been avoided or the pain minimized. If anyone had the guts to do so, of course.

California state revenues are already coming in shy of the state budget's overly optimistic projections.

A four-part series examining the cuts to higher education funding in California, and the simple ways in which the cuts could have been avoided or the pain minimized. If anyone had the guts to do so, of course.

Late Tuesday night, the California legislature passed its FY 2012 state budget that relies mainly on steep spending cuts to close the approximately $10-billion dollar gap in the $90-billion dollar general fund budget.

Weekly of review of union rallies held around the country.

Unions from California to Pennsylvania organized events to protest state budget cuts and rally for jobs in what was a very busy week full of union activity around the country.

State legislatures are still working out the logistics to make the July 1 budget deadline. The states on the West Coast are working on getting their finances in some semblance of order, while those on the East Coast are still struggling to balance their budgets for the upcoming fiscal year.

It's that time of year again; one by one, states are passing their budgets for the next fiscal year. Shortfalls still loom for some while others have used a variety of tools to balance their books. Some states have taxed, others have cut, and still others have just gotten creative with their accounting.

Is the bankruptcy option for states an effective tool to address the looming state fiscal crises?

We're still a long way from reform, but the more the public learns of abuses the more supportive it may become of real reform.

So many reasons... which one is real?

Fiscal stress and strain continues in the fifty states this week as more legislators look for ways out of the black holes in which they find themselves. Solutions sought by states include delayed retirement, increased pension contributions, and furloughs.