Waking from Bankruptcy Shock, Stockton Comes Back to Life

Link: https://www.governing.com/now/waking-from-bankruptcy-shock-stockton-comes-back-to-life

Graphic:

Excerpt:

The metrics on the OGSP give a high-level view of how progress can be measured, but they are just part of the data that Regan’s office collects. Hundreds of other data points are in a performance scorecard that includes factors that contribute to attainment of large targets such as reduced crime rate.

High-level goals may take time to achieve. The StocktonStat portal, scheduled for launch on June 30, will include data on the number of potholes and streetlights repaired, or square feet of graffiti removed, says Regan. “The stat process, and this shared data, are part of a continuous conversation and relentless follow up toward our performance targets.”

Author(s): Carl Smith

Publication Date: 16 June 2021

Publication Site: Governing

Kansas May End Federal Jobless Aid to Encourage Workers

Link: https://www.governing.com/work/kansas-may-end-federal-jobless-aid-to-encourage-workers

Excerpt:

Gov. Laura Kelly said Thursday she was weighing whether to end Kansas’ participation in federal unemployment programs started during the COVID-19 pandemic, as many Republican states say they will pull out of the initiatives.

Businesses have complained of difficulties in hiring workers, something many Republicans have chalked up to a slate of programs aimed at cushioning the blow for residents laid off due to the economic turmoil of the past year.

Kelly’s office confirmed in a statement Wednesday that Kansas wasn’t following in the footsteps of Missouri, Iowa and about a dozen other state in ending their participation in the programs.

Author(s): Andrew Bahl, The Topeka Captial-Journal

Publication Date: 14 May 2021

Publication Site: Governing

Colonial Pipeline Hack Reveals America’s Vulnerabilities

Link: https://www.governing.com/security/colonial-pipeline-hack-reveals-americas-vulnerabilities

Excerpt:

If you want to get Americans’ attention, hit their ability to drive. Panic buying and gas lines were quickly seen in the Southeast. Midweek, 71 percent of the gas stations in car-burdened Charlotte, North Carolina, were dry.

Ransomware takes control of a company’s or organization’s software or data until the owners make a payment. Even paying a ransom doesn’t guarantee the owners will get control again.

Initial reports said Colonial refused to pay ransom. But Colonial handed over nearly $5 million to the hackers. Bloomberg reports that the payment was in difficult-to-trace cryptocurrency. In exchange, Colonial received a decrypting tool to help restore its disabled network.

DarkSide, believed to be based in Eastern Europe, released a statement saying, “We are apolitical, we do not participate in geopolitics … Our goal is to make money, and not creating problems for society.”

But no one is safe from cybercrime, whether the attacker is a shadowy group or tied to a nation-state, whether they want money or data or to paralyze infrastructure. Whether the victim is an individual who opened an email containing malware or a leading technology company.

Author(s): Jon Talton, The Seattle Times

Publication Date: 14 May 2021

Publication Site: Governing

The Bitcoin Boomlet Comes to Local Government

Link: https://www.governing.com/finance/the-bitcoin-boomlet-comes-to-local-government.html

Excerpt:

Lastly, Bitcoin is an investment vehicle that, if held in the city’s treasury, could help Miami’s fiscal prospects. After all, a currency whose per-unit value has increased 18,641 percent the last five years is more tempting than a currency that gradually declines in value. 

But just as Bitcoin has proven upwardly volatile, that volatility can spike downward (such as when Bitcoin lost one-third of its value in a two-week period in 2017). This means that any money Miami invests in Bitcoin could plummet in value if Bitcoin crashes. 

There are also technical issues with Bitcoin. The mining process consumes lots of energy, making it expensive and environmentally hazardous to produce. Bitcoin has an average transaction fee of $23, and relatively long processing times of between 10 minutes and several hours. And there are questions about whether, once all 21 million bitcoins are mined, monetary incentive will exist for the network of nodes to continue maintaining the blockchain. 

Author(s): Scott Beyer

Publication Date: 22 March 2021

Publication Site: Governing

How States Can Gird for the Coming Fights Over Taxing Digital Ads

Link: https://www.governing.com/finance/How-States-Can-Gird-for-the-Coming-Fights-Over-Taxing-Digital-Ads.html

Excerpt:

Maryland’s Legislature recently overrode a gubernatorial veto and enacted a new tax on digital advertising — the first of its kind among the states. It was inevitable that somebody would break the ice. Last August, I explored the revenue implications for states and localities of a federal tax on interstate digital commerce. Globally, the COVID-19 pandemic has accelerated business migration to Internet platforms, making this the new frontier for tax policy.

Maryland legislators deserve credit for planting their semi-checkered state flag first, to stake their claim, but they are still far from the finish line. Anti-tax wonks point to a host of possible legal snags that could tie up the Maryland tax for some time. They complain that it’s unduly vague, imprecisely crafted, and invites double taxation. The social media goliaths are already protesting that it’s unconstitutional under the commerce clause, which gives Congress supreme authority to regulate interstate business. To salvage its tax, Maryland may find it necessary to make defensible amendments that can withstand judicial scrutiny. But rather than going it alone, the state could use some help from its peers eyeing digital ad taxes of their own.

States have been called the laboratories of democracy, and rightfully so. However, when it comes to national and international commercial activity that sweeps across state lines through complex multi-party transactions, let’s face it: Heterogeneity and administrative complexity are not desirable outcomes. Fifty separate labs tinkering with different tax formulas will drive companies nuts.

Author(s): Girard Miller

Publication Date: 13 April 2021

Publication Site: Governing

Vaccine Passports: Here’s How Excelsior Pass Works

Link: https://www.governing.com/now/Vaccine-Passports-Heres-How-Excelsior-Pass-Works.html

Excerpt:

The U.S. has its first official vaccine passport.

New York’s Excelsior Pass, developed by IBM, is essentially a simple digital wallet that can be accessed on mobile devices, which holds three items: your name, a QR code and a green check mark.

The idea is that people can use the app to prove to somebody — say, a ticket-taker at the door of a sports stadium, an airline or the staff at a large event — that they’ve received a vaccine against COVID-19. In actuality, the app can also prove that somebody’s received a negative test for the disease.

Author(s): Ben Miller

Publication Date: 8 April 2021

Publication Site: Governing

So, Can States Cut Taxes or Not?

Link: https://www.governing.com/finance/So-Can-States-Cut-Taxes-or-Not.html

Excerpt:

Most observers believe that the Treasury will interpret the law narrowly. Rather than seeking to claw back funds from any states passing tax cuts or credits, the feds are considered likely to challenge only those states that clearly use federal dollars to pay for them. “Nothing in the act prevents states from enacting a broad variety of tax cuts,” Treasury Secretary Janet Yellen wrote in a response to the AGs. “It simply provides that funding received under the act may not be used to offset a reduction in net tax revenue resulting from certain changes in state law.”

But the fact that the law blocks federal money from being used even indirectly to pay for tax cuts has state officials not just worried but angry. “Democrats in Washington and in the White House are not going to tell me, or the Georgia General Assembly, that we can’t cut taxes for hard-working Georgians,” Gov. Brian Kemp complained at a news conference last month.

….

That prohibition lasts as long as the stimulus dollars are spent, which will be into 2024. And there are limits, Walczak notes, on where and how states can spend federal aid. They can use the money to address pandemic and health needs, for example. While those are clearly ongoing, much of the cost of vaccine supply and distribution has been underwritten by the feds. Other costs in these areas have already been addressed by last year’s federal CARES Act, which some states struggled to spend.

Author(s): Alan Greenblatt

Publication Date: 7 April 2021

Publication Site: Governing

Will States Resist Fresh Billions for Medicaid Expansion?

Link: https://www.governing.com/now/Will-States-Be-Able-to-Resist-Billions-for-Medicaid-Expansion.html

Excerpt:

As part of the most recent federal stimulus, states that haven’t expanded Medicaid under the Affordable Care Act can receive additional matching funds. Rather than paying 10 percent of the cost for new recipients, they’d only have to pay 5 percent over the next two years. Additional subsidies mean they would actually cost themselves money by refusing to expand. Florida, for instance, would come out ahead by $1.25 billion, even after paying its share of expanded coverage. Still, Gov. Ron DeSantis and legislative leaders remain opposed.

….

It’s true that the 95 percent match rate will only last for two years. But plenty of states have put in place triggers that would end their expansion programs if the federal share ever dipped below 90 percent, notes Trish Riley, executive director of the National Academy for State Health Policy.

Author(s): Alan Greenblatt

Publication Date: 31 March 2021

Publication Site: Governing

Marin County Tries a Universal Basic Income Program

Link: https://www.governing.com/community/Marin-County-Tries-a-Universal-Basic-Income-Program.html

Excerpt:

Marin County, Calif., supervisors have allocated $400,000 to participate in a universal basic income experiment with the Marin Community Foundation.

The foundation plans to spend $3 million to give $1,000 a month to 125 low-income women for 24 months. To qualify, the women must have a child under the age of 18.

“The ultimate endgame for this demonstration project is to have an example of how cash aid can be really helpful in terms of alleviating poverty, to test the usefulness of this approach to addressing poverty and addressing some of the racial inequities that we know exist in the county and beyond,” Johnathan Logan, a foundation vice president, told the Board of Supervisors before the unanimous vote on Tuesday.

Author(s): RICHARD HALSTEAD, THE MARIN INDEPENDENT

Publication Date: 25 March 2021

Publication Site: Governing

Firearm Mortality Rate, Deaths by State: Map

Link: https://www.governing.com/now/Firearm-Mortality-Rate-Deaths-by-State-Map.html

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Excerpt:

But when firearm mortality is viewed state by state, a strong variation emerges. Using data from the Centers for Disease Control and Prevention, Massachusetts had the lowest death rate of just 3.4 per 100,000 in 2019, the latest year data is available. Alaska and Mississippi are tied for the highest: 24 deaths per 100,000. The following map and table provide specific numbers for each state.

Publication Date: 24 March 2021

Publication Site: Governing

Can Fiscal Alchemy Bolster Public Pension Funds?

Link: https://www.governing.com/finance/Can-Fiscal-Alchemy-Bolster-Public-Pension-Funds.html

Excerpt:

One way to put a quick sheen on pension funds’ balance sheets is to issue municipal bonds at a lower rate of interest than the pension fund is expected to earn. These “pension obligation bonds” (POBs) have a long and checkered history. The first one was sold tax-exempt by the city of Oakland, Calif., in 1985. It stirred up a hornet’s nest at the IRS, which quickly realized that the lower tax-exempt interest rate was subsidized by Uncle Sam in a no-brainer for the pension fund that in theory could just invest in taxable bonds to make a profit, even without risking money in stocks. Congress was prodded to prohibit the use of tax-exempt debt where there is a profit-seeking investment “nexus,” and thus was born a thick book of IRS “arbitrage” regulations. Consequently, POBs must now be taxable, with a higher interest cost.

When interest rates are low, as they are today, the underwriters and many financial consultants come out of the woodwork to pitch their POB deals. The lure is always the same: “Over 30 years, you will save money because history shows it’s almost a certainty that stocks will outperform low bond yields,” even if they are now taxable. I’ve written extensively on the foreseeable cyclical risks of selling POBs when the stock market is trading at record high levels: The underwriters and deal-peddlers will sneak away with their fees from the deal, and public officials will be left holding the bag whenever an economic recession or stock-market plunge drives the value of their pension funds’ “new” assets below the level of their outstanding POBs. The Government Finance Officers Association (GFOA) has long opposed POBs for this reason, among others. POBs make sense to me only when they are issued in recessionary bear markets.

Author(s): Girard Miller

Publication Date: 16 March 2021

Publication Site: Governing

Why It’s Time for States to Raise Their Tobacco Taxes

Link: https://www.governing.com/now/Why-Its-Time-for-States-to-Raise-Their-Tobacco-Taxes.html

Excerpt:

In the face of the pandemic, states across the geographic and political spectrum — including Georgia, Hawaii, Indiana, Kansas, Minnesota, New Mexico and New York — are actively considering tobacco tax increases during their legislative sessions. Last month, a bipartisan supermajority in the Maryland Legislature moved to increase the state’s cigarette tax by $1.75 per pack, the first increase in nearly a decade, and to establish a tax on e-cigarettes to fund tobacco cessation and health programs.

The growing legislative momentum comes after voters in Colorado and Oregon approved tobacco tax increases in ballot measures last November. Colorado, which had not raised tobacco taxes in 16 years, will collect an estimated $175 million in revenue during the 2021-22 budget year for tobacco cessation and health programs. In Oregon, higher tobacco taxes will generate an estimated $160 million per year and help to fund the care of people with mental illnesses and other conditions.

Author(s): NANCY BROWN, AMERICAN HEART ASSOCIATION

Publication Date: 15 March 2021

Publication Site: Governing