Author Archive

Bertha and the French Professor: Lessons for Public Private Partnerships

Jean Tirole is an influential, respected, and by all accounts gracious man who won this year’s Nobel Prize in economics. Bertha is a 7,000-ton tunnel boring machine that’s been stuck under Seattle for nine months—but is still tweeting—as state officials and a private contractor battle over who should pay to get her out. What do […]

It’s Not Easy to Escape the Local Pension Vise

Last week’s federal court ruling in the municipal bankruptcy case of Stockton, CA highlighted the enormous challenge faced by local governments with underfunded public pensions. There are ways out of this vise, but none are easy, and all are fraught with risks. State governments face at least a $1 trillion gap between pensions promised to […]

A New Look at State and Local Pension Liabilities

What if state and local government deficits doubled over night and nobody noticed? That’s what happened last Wednesday when the Bureau of Economic Analysis released its comprehensive revision of the National Income and Product Accounts. As my TPC colleague Donald Marron noted, the new BEA numbers downsized the federal government relative to GDP.  They assigned […]

Detroit’s Pension Blues, and America’s

In the week since Detroit became the largest U.S. city to declare bankruptcy, many commentators have speculated about what, if anything, this action means for the rest of the country.  One narrative is that Detroit is sui generis – a city whose fiscal problems were long in the making, aided by broad macroeconomic forces and […]

No City is an Island: What the Stockton City Bankruptcy Means (and Doesn’t)

A few years ago, it was fashionable to compare California, Illinois, or whatever U.S. state was struggling financially to the troubled island nation of Greece.  Now, with Stockton, California the largest U.S. municipality to enter bankruptcy, it may be tempting to make another Mediterranean comparison – this time to the troubled island nation of Cyprus. […]

The Downside of States as Laboratories for Tax Reform

With state finances gradually improving, some Republican governors are turning their attention to fundamental tax reform.  Louisiana Governor Bobby Jindal has proposed replacing his state’s personal and corporate income taxes with higher sales taxes.  Nebraska’s Dave Heineman and North Carolina’s Pat McCrory would do something similar, broadening the sales tax base and perhaps including some […]

Tax Reform, Up Close and Personal

On Monday, I attended my first meeting of the District of Columbia Tax Reform Commission.  The independent commission was authorized by the Tax Revision Commission Reestablishment Act of 2011 and is chaired by former DC Mayor Anthony Williams.  It includes ten other members appointed by Mayor Vincent Gray and Council Chairman Kwame Brown. I was […]

States and the Affordable Care Act: An Offer They (Still) Can’t Refuse

For months, astute observers called Medicaid the “sleeper issue” of the Supreme Court’s Affordable Care Act deliberations.  Last Thursday, they were proven correct.  A majority of the Supreme Court struck down a provision of the law giving the Health and Human Services Secretary authority to pull all federal Medicaid funds from states refusing to extend […]

California’s Budget Crisis: Part XII

Summer is here and that can mean only one thing – the start of movie season.  Well, that and California’s annual budget mess.  Like a tired franchise that keeps coming back, it’s the same story year after year, sometimes gussied up with computer generated effects or a surprise cameo appearance. On Saturday, Governor Jerry Brown […]

State and Local Budgets in 2011: The Crisis that Didn’t Happen (Yet?)

The year’s top story in state and local government was “hundreds of billions of dollars” in municipal bond defaults.  Oh wait, that didn’t happen.  It was “states coming to Congress as mendicants, seeking relief from the consequences of their choices.”  No, although the Dickensian imagery may fit with the holiday decorations, that didn’t happen either.  […]