Wednesday, August 29, 2012

Pension Guarantees for State Govt. Retirees?

A recent survey by the Center for Retirement Research at Boston College finds retirement benefits to state employees and retirees may not be as certain as some would think/argue.  According to the researchers, many details can be legally challenged in favor of the state/employer since employment contract terms are often used generally as opposed to being clearly defined. 

Thursday, August 23, 2012

State Pension Controversy

Pension underfunding and bleak projections have caused state governments – Illinois comes to mind due to its geographic proximity to us – to discuss potential benefit reductions for future, and even current, retirees.  In fact, states like Rhode Island, Louisiana and Florida have recently decided to implement significant changes.  It’s no surprise that lawsuits have arisen in response. 

Friday, August 17, 2012

Don't Hold Your Breath

We’ve seen the markets ticking higher, with six consecutive weeks of gains. Yesterday, the S&P 500 reached its highest level since April and was within 10% of the all-time high of Oct. 9, 2007. Even so, with much of Europe on holiday and trading volume being low, there is a sense that investors are holding their breath, waiting for Europe to get back from vacation, for the next policy announcement, for the next big headline to move the markets.

Friday, August 10, 2012

Kick the Can

“Kick the can down the road” – slang…Developing a temporary, inadequate solution to a problem in hopes that it will go away or be addressed by someone else. 

Four public school districts in San Diego, California have recently sold huge long-term bonds to avoid making tough decisions today.  Payments on the Poway Unified district’s $105 million bond will not begin for 20 years.  At that time, payments totaling $982 million will be made over the following 20 years!  That equates to almost $50 million per year or $1 million per week in payments!  That’s about 20% of the district’s total current budget.  In addition, the bond is reportedly not callable (meaning it cannot be repaid early or refinanced).

How will the money be spent?  Updates include new computers, wireless data systems, alarm systems, recyclable building materials, landscaping, permanent outside eating areas, etc.  Hopefully all the updates are enjoyable and create a better learning environment since those students who remain in the district after graduation will pay dearly for it.  At the current pace, however, there may not be any upper income taxpayers in the district 20 years from now.  The Fox Business article references the following California Taxpayers Association data:  the number of California tax returns with $500,000 or more of adjusted gross income dropped from 146,221 in 2007 to 98,610 in 2009.

The full Fox Business article can be viewed here:  http://www.foxbusiness.com/investing/2012/08/08/california-school-districts-spend-1-billion-to-borrow-100-million/

Thursday, August 2, 2012

Sayonara USA?

The number of expatriates of the United States increased six fold from 2008 through 2011.  In 2008, only 231 individuals renounced their U.S. citizenship; in 2011, the same statistic measured 1,781 individuals.  Many would argue that this is partially due to the tax atmosphere here in the states.