Sold Out Futures by State:  The Sold Out Future Ranking For 2019

Over the past three posts I’ve documented how today’s and tomorrow’s Americans have had their future sold out and cashed in with regard to state and local government debts, inadequate past infrastructure capital construction, and retroactively increased and underfunded public employee pensions.  Over and above the generational inequities at the federal level in government, in the private sector, and even in many families.  Plus climate change, which some have claimed will be so bad I should stop worrying about other aspects of generational inequity.

These aren’t technical issues to be discussed one at a time, as if they were independent of each other.  They are a single ethical issue to be discussed and understood as a whole.  Look at any issue, any institutional decision in government, business and the professions, any social trend of the past 40 years, and examine how it has affected those in different generations – who benefitted, and at whose expense.  And you will find the same thing.  

That is why our society is in decline, something all those crazed about the tribalist cultural issues that consume out geriocratic politics apparently understand, and are desperate to find someone else to blame for.  The Sold Out Futures by state ranking, based on the state and local government part of it, is my contribution to the bigger story, one that remains under Omerta.  

Adding it up, on average today’s and tomorrow’s Americans have inherited a Sold Out Future due to past state and local government deals and non-decisions equal to 47.0% of their personal income in FY 2019.  That is virtually unchanged from the 47.1% I found when I did the same analysis for FY 2012, despite a much stronger economy and another asset price bubble.   

Unlike the other generational inequities in our society in the wake of Generation Greed (and more like the differences between families), the state and local government burden is not the same everywhere in the U.S.   It is greater or smaller depending on where you live.  It attaches to the people there now, unless they move away from it, and may eventually attach to each place’s real estate, since real estate cannot pick up and move.  This final post in the series will rank states, and New York City and the Rest of New York State separately, based on how sold out their futures are.


In the new ranking, I use the Bureau of Economic Analysis estimate of public employee pension underfunding by state, rather than my own back-of-the-envelope estimate based on benefit payments at 4.0% or less of pension plan assets, because the BEA estimate makes New York City look somewhat less bad.  I always try to lean against the argument I’m making, although one could make the case that my measure is better for slow growth areas with “stabilized” pension systems such as NYC, while the BEA estimate is better for fast growing areas with relatively few current pension beneficiaries compared with future pension beneficiaries.

The previous time I did these calculations, with data through FY 2016, the worst-off state was Rhode Island, with a Sold Out Future burden equal to 82.1% of its residents’ personal income.  If it were a separate state, however, New York City would have been even worse off with a burden from the past equal to 94.5% of city residents’ personal income.

The worst-off state in FY 2019, out of 50 states plus the District of Columbia (a rank of 51 in the “Sold Out Future Ranking” table), was Illinois, where debts, past capital construction shortages and pension underfunding totaled 82.6% of state residents 2019 personal income.  Believe it or not, if New York City were a separate state it would have only been second worst behind Illinois, with a Sold Out Future total at 79.5% of personal income.  But only because New York City’s 2019 personal income was so high, whereas people had already started to flee Illinois as taxes soared and public services collapsed.  And because the Bureau of Economic Analysis reports less pension underfunding for NYC, compared with the 4.0% rule.  

What will happen now, in the wake of COVID-19 and work from home, is uncertain.  We do that New York City has not yet recovered most of the jobs it lost in the pandemic, while the U.S. as a whole has recovered almost all of them.  The U.S. unemployment rate is half that of New York City, as unemployed low-wage workers have been left behind here as others departed, as in the 1970s.  Meanwhile, it would appear that the providers of virtually every public and publicly-funded service in New York City, from the teachers, to the police, courts and jails, to the transit system, to health care and social services, are demanding additional money, and threatening to reduce what they provide otherwise.  Essentially engaging in a semi-strike against other New Yorkers, while still getting paid.  While also running ads that say “we are all in this together.”

Other states where older generations have most victimized those coming after include (in order from the worst) Connecticut, with a 2019 Sold Out Future total at 71.0% of that state’s residents’ personal income, Rhode Island at 68.4% — no longer the worst but still bad, California at 65.1%, Kentucky at 61.0%, Michigan at 58.3%, Hawaii at 57.5%, New Jersey (adjusted) at 57.2%, Ohio at 55.0%, Massachusetts at 54.7%, and Missouri at 54.0%.   California comes out worse in the new ranking than in the old one, in part because it was a rapid growth state until recently, and will have even more public pension recipients in the future than it does now.   Thus, the BEA pension underfunding level for that state comes out far worse for California than in my back-of-the-envelope estimate, the reverse of New York City.

If it were a separate state the Rest of New York State, taken together, would once again have been less bad than the U.S. average, with a Sold Out Future burden of 38.0% of area residents’ 2019 personal income.  It would have ranked the 20th.  That is a very different situation than New York City, even though many of the decisions to cash in New York’s future have been made at the state government level.  Basically, New York’s elected officials have cashed in New York City’s future to benefit special interests both in New York City and in the Rest of the State.  Despite the turnover in NYC’s population, the same sort of people who pillaged the future of NYC the prior time, in the late 1960s and 1970s, still control many of the political offices here, notably the state legislature.  The old guard is replaced by their rear guard, the staff members elected appointed to replace them.

The states with the least Sold Out Futures still include a lot of large, rural, low-population states that get a very good deal from the federal government on infrastructure funding – Alaska, Wyoming, South Dakota, Nebraska, Utah, North Dakota, Idaho, Iowa and Montana.  As reported in the debt and infrastructure post, the latest federal infrastructure bill is likely to favor them over places such as New York City once again.  Most of these states rank near the top due to high past capital construction spending on infrastructure and education buildings as a share of their residents’ relatively low personal incomes.  Alaska thus finishes near the top overall despite the second worst pension funding of all states, and high state and local government debts.  On the other hand, the fact that the District of Columbia had its pensions bailed out in 1991 and was then put under a financial control board, ending up with the best funded public employee pensions, helps its cause.

The list of states that are least-worst-off also includes some fast growing, low tax Sunbelt states – Utah, ranked 6th with a Sold Out Future burden equal to 18.4% of state residents’ 2019 personal income, Washington, ranked 8th at 25.7%, Arizona at 26.7, Florida at 29.9%, and North Carolina at 31.0%.  Both people and businesses, other than those that need to be located in the bi-coastal educated labor centers, have been moving to these states on a large scale for a couple of decades.  People may not understand why, but perhaps they sense that in these states the state and local government services and benefits they get seem to be a good deal compared with the state and local taxes they pay.  Not because of efficiency, as they might claim.  But because past residents and politicians robbed them less.   

Although some of these states may not have Sold Out Futures yet, they may be currently selling, repeating the future-depleting choices other states made earlier. Because their residents don’t’ want to pay taxes.  And some of these growing states are getting a bigger population, but not a richer one.  Which may explain why they get a much better deal from the federal government than New York does with regard to Medicaid funding.

In the case of Florida, it had been a poor southern state before affluent seniors from the Northeast started retiring there, but its per capita income rose to about the U.S. average in 1970.  It was still at about the national average in 2007, but was 5.4% below average in 2019 and 6.4% below average in 2020.  North Carolina’s per capita income was just 7.8% below the U.S. average in 2008, but it was 15.0% below average in 2019 and 15.5% below average in 2020.  Arizona’s per capita income peaked at just 2.6% below the national average in 1971, before falling almost continually to 18.9% below average in 2015, and still 16.6% below average in 2020. 

By this measure Washington has stayed relatively rich and Utah has gotten richer.  But the same might be said of New York (due to Downstate), New Jersey and California.  Otherwise, these states’ Sold Out Future costs would have been even worse as a percent of income.  They need taxpayers to stick around in a diminished future to pay for the past.

There are some states that have improved from FY 2012 to FY 2019.  In some cases, such as New York City, this is due in part to a boom in current personal income compared with past debts, and a stock market bubble that reduced apparent pension liabilities, factors that may not continue.  The city’s burden from the past shrank from 94.5% of state residents’ personal income in FY 2012 to 79.5% in FY 2019.  Moreover, switching to the BEA pension funding measure reduced the NYC Sold Out Future percent for FY 2019 by 7.80%.   This accounted for more than half the decrease.

The future is also less sold out in the Rest of New York State, down from 46.3% of personal income to 38.0%, and in New Jersey, down from 64.4% to 57.2%.  Other states that rank among the worst but have seen improvements include Rhode Island (from 83.4% to 68.4%), Pennsylvania (from 61.2% to 48.6%), Michigan (from 70.5% to 58.3%), Ohio (From 63.5% to 55.0%), and Massachusetts (from 60.0% to 54.7%).  Three years from now we’ll see if these positive trends have remained in place.

With the national average unchanged, however, if some states got better, others had to get worse.   Among those states is California, with an increase in the Sold Out Future percent from 56.5% in FY 2012 to 65.1% in FY 2019, or 8.6%.  The shift to the BEA measure of the state’s pension underfunding liability, however, drove the overall number up 17.6%.  Otherwise, California continued to improve, thanks to another tech bubble jacking up personal income.  Hawaii’s Sold Out Future percent increased the most of any state, from 44.7% of personal income in FY 2012 to 57.5% in FY 2019.  That was before 2020, when COVID-19 hit that state’s economy harder than any other.

A significant number of relatively poor Southern and Southwestern states have a greater Sold Out Future burden than they once did, even if not more than the U.S. average.  These include New Mexico (at 48.3% of state residents’ personal income, up from 36.9% in FY 2012), Arkansas (43.1%, up from 31.8%), and Mississippi (53.2%, up from 48.5%).  Illinois is also worse off, something it could ill afford, based on the new calculation.  

These numbers would probably be very theoretical to most people.  What is not theoretical is the share of their personal income being taken in state and local government taxes and used to pay for their Sold Out Futures, with no public services or benefits in return.  Including the share of their personal income going to interest on debts and public employee pension contributions.

Overall, total state and local government tax revenues equaled 10.1% of personal income in FY 2019, while interest plus taxpayer pension contributions equaled 1.61% of income.  That’s about one in six state and local government tax dollars sucked into the past. 

The worst-off state based on interest plus taxpayer pension contributions was, as expected, Illinois at 2.88% of personal income.  That means 27.1% of all tax payments were being sucked into the past in that state.  No wonder public services that seemed like such a great deal back when the future was being sold seem like such a ripoff now that the future has arrived.   You think the fairness of this, who benefitted, and who lost, would be the number one issue in that state’s elections for Governor and the state legislature next year.  Instead, it is likely to be swept under the run and not discussed.

Just as it was not discussed in the election for NYC Mayor this year.  If New York City were a separate state, however, it would have been even worse off, with interest plus taxpayer pension contributions equal to 3.85% of city residents’ personal income.  That’s up from 3.67% of city residents’ personal income in FY 2016, the prior year for which I did this analysis.  It has gotten worse, and if interest rates rise or inflated asset prices fall, revealing the need for additional pension contributions, it would get worse still. 

New York City’s state and local government tax burden would have ranked first by far if it were a separate state at 16.0% of personal income (New York State as a whole in fact ranks first at 14.6% of personal income).  But 24.0% of that huge tax burden is sucked into the past, not including additional items such as excess retiree health insurance costs and the additional economic and public operating costs caused by deteriorating infrastructure.

If the Rest of New York State were a separate state it would have ranked 41st, with an interest plus taxpayer pension contribution of 1.67% of the personal income of the residents of that area.  That’s about half the burden of New York City, but still above the national average.  Don’t expect anyone to talk about this in the campaign for New York State governor and state legislature this year, either.  In Upstate New York they haven’t been as successful in luring in people to pay prior generations’ bills, along with the ongoing deals for those on the inside.  The mean earnings per private sector worker there is basically about the same as it was in 1969, the first year available, according to the Bureau of Economic Analysis.  As in many “rustbelt” areas.  The mean earnings per state and local government worker is more than 80 percent higher.  New York City taxpayers have to cover a big chunk of that, too.

New Jersey was better off than the U.S. average with an interest plus pension contribution burden of 1.47% of state residents’ personal income, but only because it is not contributing enough to stop its public pensions from falling further into the hole.  Benefit payments were 7.8% of pension plan assets in FY 2007, at the peak of the prior bubble, 13.8% in FY 2016, the prior time I did this analysis, and 14.4% in FY 2019.  Even so, today’s New Jerseyans still feel they are being ripped off.   When that state’s Governor Phil Murphy was first elected four years ago, I suggested that he put all the separate costs from the past into a separate tax income and property tax surcharge that everyone could see.  

He didn’t, and so four years later – after a campaign in which these generational inequities were once again kept under Omerta – he was almost thrown out of office, as people blamed him for the situation he inherited.

Other states where interest on state and local government debts and contributions to state and local government pensions absorbed the highest share of people’s personal income are, in order, California (2.33% of that state’s residents’ 2019 personal income), Alaska (2.21%), Kentucky (2.12%), Rhode Island (2.02%), Louisiana (1.86%), Pennsylvania (1.80%), and the District of Columbia (1.77%).  If DC has one of the best Sold Out Futures rankings, then why is its interest plus pension contribution that high?  Because it is paying enough to avoid failing into the hole –whereas some of the states and places above are one asset price correction or interest rate rise away from paying even more.  And, of course, residents of and businesses located in DC are having half the percent of their incomes sucked into the past in excess state and local taxes compared with NYC. 

Getting out of the hole often requires higher taxes, but raising taxes is problematic if the state and local tax burden is already high, and has already gone higher.  For the U.S. as a whole, the state and local tax burden was 9.9% of U.S. residents’ personal income in FY 2012 and also 9.9% in FY 2016.  It was 10.1% of personal income in FY 2019.  The average for all the years from 1977 to 2019 is also 10.1%.  But New York City’s state and local government tax burden was already 16.0% of personal income in FY 2019, and going up.  

Several of the other states with high state and local government tax revenues as a percent of their personal incomes aren’t necessarily paying out of their own residents’ incomes.  North Dakota, Alaska and Wyoming typically get lots of tax revenues from oil and gas extraction, while Vermont and Maine have the highest percent of their housing units as second homes.  The income to pay the related property taxes comes from elsewhere.  The place that is most like New York City with regard to its tax burden on residents and businesses is – the Rest of New York State, followed by Minnesota.  But neither is all that close.

In the previous analysis, I calculated what it would take for each state to pay off its accumulated Sold Out Future ranking as a 30 year mortgage, funded by a special surcharge on property taxes.  The idea was based on a proposal made, and then withdrawn, in Illinois to prevent rising taxes from destroying that state’s economy by making those who Sold Out Its Future pay their share.

New taxes wouldn’t affect people thinking of moving to Illinois. While they would have to pay higher property taxes, that would be offset by not having to pay as much for their new homes. In addition, current homeowners would not be able to avoid the new tax by selling their homes and moving because home prices should reflect the new tax burden quickly.

In other words, the surcharge would be “capitalized” in the price of housing, because new residents and businesses wouldn’t be conned into thinking things were less bad than they were by those selling out and moving away.  The way the catastrophically high taxes and bad public services of New York City in the 1970s, after a prior generation of special interests had cashed in its future, led to cheap and sometimes free real estate here.  “Progressive” legislators often propose laws to force sellers and realtors to disclose property defects to buyers.  They don’t seem so interested in having the collective defects documented here disclosed. Then again, it seems as if the general public has “waived inspection.”

The prior time I did this I calculated the amount needed to pay off state and local government debts entirely.  But Generation Greed didn’t inherit zero debt, and its successors shouldn’t expect to either.  So in this analysis I only propose a high enough tax increase to get the ratio of debt to personal income down to the U.S. average of 1981, as the “cut my taxes and give me more benefits” politics was taking hold, while also getting out of the infrastructure and pension holes (the retiree health insurance hole would be in addition).

Measured as a share of state residents’ personal incomes, the additional state and local tax revenues needed to get out of the hole were highest in Illinois at 3.48%.  This was followed by Connecticut at 2.91%, Rhode Island at 2.74%, California at 2.56%, Kentucky at 2.32%, Michigan at 2.23%, New Jersey (adjusted) at 2.23%, Hawaii at 2.19%, Ohio at 2.07%, Massachusetts at 2.04%, Missouri at 2.02%, and Mississippi at 1.98%.  Per year for 30 years.

If it were a separate state, however, New York City would have been worse off than any of them, with additional taxes at 3.62% of personal income.  Of course, New Yorkers may be paying some of that now, and may have been paying that much all along.  As the more they put in to get out of the hole, the more the interests that control the state legislature grab to put the city further into the hole.  

At one time New York tried to underfund their pensions even more than they have, but the unions sued and won.  Since the pensions are guaranteed to never be reduced (but can be retroactively increased at any time in secret with no debate at 3 am irrevocably), New York City, New York State and local governments in the Rest of New York State have to put in their actuarily required contributions, with some mild limits on how much those can be lied about.  Unless the unions quietly agree to temporary underfunding in exchange for benefit increases, as in the massive 2000 pension deal.

Incredibly, in New Jersey and Illinois the state’s highest courts ruled that while public employees have an absolute, irrevocable right to the pensions they have been promised in deals with their politicians, the politicians don’t have an obligation to fund the necessary taxpayer pension contributions.  They are allowed to shift the entire cost of public employee retirement benefits to future state residents, someday in the future.  Incredibly, New Jersey’s highest court re-affirmed this just six years ago.

If there were any justice, those justices would have all their retirement benefits taken away if they haven’t already made it to the grave.

What if a special property tax surcharge were used to pay off these debts, as recommended by economists who worked at the Federal Reserve Bank of Chicago?

On average, U.S. property taxes would rise by 56.1%.   In part because property taxes are so high in the Northeast already, the increases would be 25.8% for the Rest of New York State, 44.2% in New Jersey – and 73.3% in New York City.  Put that in your pro-forma and smoke it.

States with lower property taxes today would see bigger percent gains, with such taxes more than doubling in Kentucky and Alabama.  In California, future state residents would end up having their property taxes nearly double, to offset the lower taxes older and former residents received as a result of Proposition 13.  Property taxes would rise by 93.7% in Missouri, 89.7% in New Mexico, 88.0% in Arkansas, 87.7% in Hawaii, 80.7% in Louisiana, 79.5% in Ohio, 77.9% in Michigan, 75.6% in Nevada, 75.2% in Mississippi, 72.9% in Maryland, 70.9% in Connecticut, 65.9% in Rhode Island, and 65.8% in Tennessee.

And 93.0% in Illinois, nearly doubling.  That’s after a bunch of property tax increases have already occurred to pay for pensions, in the City of Chicago and elsewhere.  (Chicago’s huge increase spared older homeowners, who also pay zero state income taxes in Illinois).

Despite Rahm Emanuel’s tax hikes, city pension debt grew by $7 billion since 2015

The Rule of 70, something I wrote about in the specific post on pensions, makes catching up nearly impossible at some point.

In FY 2019, when total U.S. state and local government tax revenues equaled 10.1% of personal income, property tax revenues equaled 3.1% of personal income.  The highest was Maine at 5.5% of personal income, Vermont at 5.3% of personal income, and New Hampshire at 5.1% of personal income, states where second homeowners from Boston and New York are carrying a large share of that burden.   

Illinois would have ranked 43rd at 4.0% of personal income, already significantly higher than the U.S. average, though still lower than the 4.4% of income in 2009 and the 4.5% if income in 1972.  That state would have to keep jacking up rates as property values fell to collect more in taxes as a percent of state residents’ personal income.  But it could be worse.  As it is in New Jersey (5.0% of state residents’ personal income), New York City (4.4%) and the Rest of New York State (5.0%).

Meanwhile, in these states a much lower share of state residents’ personal income is being paid in taxes for costs from the past.  That allows lower taxes, better services, are both.  But if pension contributions are low only because pensions are being underfunded, don’t expect this to last.  California, New Jersey, Connecticut and Illinois once had a total state and local government tax burden that was near or even below the U.S. average.  Current residents are paying yesterday’s taxes today, while most of those who shirked them are gone.  And in New York, Pataki and Giuliani didn’t cut taxes.  They deferred them, to a point where their generation was either moving away, collecting tax-exempt public employee retirement income, or both.

But why bring up the past?  Why not look to the future?  Why make people even more divided?  Why not come up with “creative solutions.”  Because until what has already happened is reckoned with and understood, and then the impact of every proposal is discussed in the context of how different generations will be affected in the context of that past, it will keep getting worse.  

You see that “Build Back Better” bill in Washington?  It would borrow even more money (since people don’t want to pay for things) for permanent increases in services for today’s seniors, the richest generations of Americans in history, for education the teachers unions, and for the environment the auto industry and its unions.  

What would expire after one year?  The child tax credit, because it would benefit young families with children. In case you’ve noticed, young adults aren’t having many children these days.  Don’t you think that will affect the viability of the U.S. economy and its senior benefits in the future?  Shouldn’t everyone else be willing to kick in a little to help people with children, as opposed to special interests related to children?  What is the federal income tax exemption for children right now?  How does the amount of per child help provided by the federal government in additional cash via the tax code today, adjusted for inflation, compare with the average family compare with 1960, when the Baby Boomers were children, and 1990, when they were parents? Back in 1960 federal help for parents of children, for those who lived comfortably but modestly, was probably all it cost to raise them.

I suspect the refundable child tax credit is temporary because the teachers’ unions don’t want it.  What if the money were used to help pay for private schools?  The Democratic politicians don’t even want it.  They just want the Republicans to take one house of Congress, so they can blame the other side when it goes away, while continuing to force the young to pay tomorrow for even more benefits for Generation Greed today.  Can you imagine the reverse – the reversible child tax benefit made permanent, and everything else expiring after one year?  Not in this country.  Not with these politicians.  Not with these values.

Let’s end with a quick trip around the country and some line charts.

There are places where public services are declining because people are not willing to pay for them.  New York City is not one of them.  New York jacked up taxes as a percent of income in the 2010s as its residents’ income was hit by recession, and now it is doing it again.  So those on the inside can get everything they promised themselves.  The state and local tax burden was 16.0% of personal income in FY2019, but everyone is demanding more money because it was 17.1% of personal income back in – FY 1977.  Even in the allegedly high-tax Northeast, no other state is or has been close.  City residents have paid and paid and paid, only to be told they aren’t paying enough.

Back in FY 1977 the wages and salaries of public employees equaled 7.6% of the personal income of city residents.  In FY 2019 that was 5.9%, barely above the U.S. average of 5.6%, even though the average place in the U.S. doesn’t have public transit, public hospitals, and public housing to the extent that NYC does, and much of it doesn’t have public water or sewer either.  Where are the rest of those taxes going?  Medicaid for senior benefits.  Retiree health benefits for public employees from the suburbs who moved to Florida.  Public services in the Rest of New York State.  And – it is being sucked into the past.

Some of it is going to contracted out services.  Given that private companies can’t jack up pension benefits and charge NYC taxpayers for services provided in the past, that’s a good thing.  Unless, that is, they are in the construction unions or school bus companies, and Cuomo is Governor and DeBlasio is Mayor.  Might higher productivity also be an explanation?  Not in NYC.

With regard to the tax burden, no Midwestern states are in New York City’s league — this chart uses the same scale as the one for the Northeast.  Michigan has seen its tax burden plunge to well below the U.S. average, even as it is apparently “unable” to pay to maintain its infrastructure, unless the federal government does it for them.  How did Illinois manage that relatively average state and local tax burden prior to the early 1990s?  Now you know.  It turns out the “City that Works” really worked for those who lived there in the past, and are now living in Arizona.  It even sold all the future parking revenues to Wall Street and spent the proceeds years ago.

The wages and salaries of public employees is down to 5.4% of personal income in Illinois, less than the national average.  Here in New York the public unions only want to talk about wages and salaries when pointing out how much they are cheated, and how little they owe us in return, not retirement benefits.  In fact, they only want to talk about starting salaries, which they try to keep as low as possible.  

In Illinois, meanwhile, I have read that new teachers – who don’t get Social Security there – are required to pay so much into the teacher pension funds, for a benefit that is so much less than prior generations got, that the taxpayer contribution for them is 0%, plus or minus.  Even as taxpayer pension contributions explode overall.  Just as I read that the practice of making new hires temps without benefits in the auto industry apparently doesn’t just apply to non-union states such as South Carolina, but also unionized operations in Michigan and Ohio.  Not long after I wrote this post that, among other things, called out the practice at the BMW plant in South Carolina, there was a GM strike because the auto workers’ union had done the same thing.

As I said, public sector or private, same trend with regard to generational inequity.  Sorry kids.  Skip the avocado toast and you’ll be fine.

Same scale. California’s state and local government tax revenues as a percent of state residents’ personal income is no longer right on the U.S. average, as it once was, but it isn’t even close to New York, and never has been.  Anti-tax advocates harp on that state’s high state income tax rates, which (unlike in New York and Illinois) retired public employees also have to pay, but don’t bring up low property taxes due to Proposition 13.  Of courses those property taxes are only low for long-time, now older residents.  When someone new buys a house or commercial property there, they get nailed with much higher property taxes on top of the high income taxes.  Meanwhile, you think that states with below average tax burdens would be satisfied with that.  Instead, they are paying even less than in the past — despite enormous unmet community needs.

Public employee wages are still a relatively higher percentage of state residents’ personal income on the West Coast, thanks to growing populations.  But I’ve read that California’s population is now falling.  Unless they want to raise taxes even more, expect public employee wages and salaries to fall further as a percent of personal income. 

That always seems to be the fight – higher taxes for the later born, service cuts for the later born, and lower pay and benefits for new hires, in some combination.  And one set or another of the politicians always claim to be on your side in that fight, whatever side that is.  Let’s engage in increasingly virulent conflict about that – while not talking about why those are now the only choices available. Service cuts apparently keep winning in Oklahoma, Texas and Colorado.

Look at the way public employee wages and salaries jump as a share of personal income in recessions, when private sector earnings (especially capital gains) fall. Perhaps service cuts are possible to get the wages, salaries and benefits of current employees back down. But debts and the cost of retired public employees don’t go away.

Meanwhile in the Southeast, many already low tax states are reducing their taxes further as if there were no tomorrow.  Or at least if those benefitting won’t be around tomorrow, so why should they care?

In Florida, the wages and salaries of public employees are down to 4.2% of personal income.  From 5.4% in FY 2007, 6.0% in 2000, and 7.0% in 1987, back when Florida was a much richer state.

What is it going to take to get this reality out from under Omerta?  When is age 62 and over going to start confronting every elected official with it at every press conference and in every interview?

The spreadsheet with this data, for every state, is, once again, here.  

At least I can say that for 30 years I did what I am capable of to stand up to the social tsunami facing the later-born in this country.  The world has become a better place during that time, global warming excepted.  Thank God.  The U.S. – not so much.  It is not the legacy I wanted. 

2 thoughts on “Sold Out Futures by State:  The Sold Out Future Ranking For 2019

  1. larrylittlefield Post author

    Rats, having cashed in the future, seem to be departing many of the sinking ships based on the latest population data, released today.

    With regard to New York and California, it isn’t just the government. It’s the cost of housing the areas that people want to be — New York City and environs, coastal California. With regard to NYC, government was a bad deal in the late 1970s and early 1980s, but real estate was cheap. Much of it was worth zero and ended up city owned. Now city residents have faced a squeeze of higher taxes and diminished services in the public sector, and lower wages and higher housing costs in the private sector, for years.

    Not that the same decisions aren’t being made in the places people are moving to, with regard to cashing in the future in the present. Not to mention at the federal level — for most of the past 40 years.

    The kicker in all this is that the liabilities and costs almost all attach to the territory, not the people. Thus they can be escaped simply by moving to a new greenfield. It’s like prospectors skipping from one clapped out mining town to the next. Or being able to run up a huge credit card in someone else’s name and skip town.

  2. larrylittlefield Post author

    More than any children and parents in decades, today’s children and parents are owed. They are the ones who have had to sacrifice to protect those older from COVID, and they are the ones who will become even worse off to pay back all those debts. And they are no one’s constituency.

    The child tax credit is the only expenditure in the Build Back Better bill worth the cost. Because it goes to those most in need in cash, rather than passing through greedy bigger fingers. Raise the revenues, keep the child tax credit, and cut the deficit.

Comments are closed.