Saturday, April 13, 2024
Hawai'i Free Press

Current Articles | Archives

Tuesday, July 16, 2013
Businesses Should Fear States' Pension Debts
By NCPA @ 3:57 PM :: 4358 Views :: Small Business, Taxes

Businesses Should Fear States' Pension Debts

NCPA July 16, 2013

In late June the ratings agency Moody's issued a report recalculating states' pension debts using more conservative metrics than the states themselves apply, says Steven Malanga, an editor for Real Clear Markets and a senior fellow at the Manhattan Institute.

  • Whereas states claim they've funded about 74 percent of the promises they've made to workers, Moody's found that the median pension funding of states was just 48 percent of the money needed to pay off those promises.
  • Moreover, 10 states had pension debt equal to 100 percent or more of their current annual revenues.

Governments are now in unprecedented territory with the pension mess, and it's not clear how it will all play out. As the Moody's report suggests, there's not even a consensus on how much states owe.

Businesses should see this as a warning, as they are a convenient target for politicians looking to stem the rise in taxes on individuals, and also moderate the cuts to basic services prompted by rising retirement costs. Indeed, some businesses are starting to figure out that their decisions on where to expand, relocate or otherwise invest their resources have to take into account the staggering debts that some states and cities have accumulated, especially since the retirement debt burden is not dispersed equally across the country. Some states are in far worse shape than others.

  • One troubling component of the uncertainty is that some state laws give government pensions unusual protections.
  • Whereas in the private sector employers are free to alter solvent retirement plans as long as they don't eliminate benefits already earned, government workers argue that once they become vested in a public pension plan, they have the right to continue earning benefits at the same level for as long as they work.
  • Courts have sometimes sided with workers.

Some state governments have switched from merely trying to collect taxes on in-state business to extending their tax arm as far as possible. That means firms with a single telecommuter in a state are being dinged for corporate income tax claims, as are firms with no physical presence in a state other than a website hosted on local server.

Indebted states must eventually become money-grabbing states, if they aren't already. Businesses that haven't learned that lesson yet will learn it the hard way.

Source: Steven Malanga, "Businesses Should Fear States' Big Pension Debts," Real Clear Markets, July 10, 2013.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT