Our finances are still solid, local officials say
State and local government officials want you to know something: Yes, budgets are tight these days, but their overall financial picture is still solid. That is the message from a new fact sheet, “Facts You Should Know,” released by the International City/County Management Association (ICMA) and 10 other state and local government organizations.
The fact sheet seeks to “set the record straight” on “misconceptions about state and local finance,” according to a news release. The facts, according to ICMA, are that, “While cities and counties have faced ongoing fiscal constraints, the vast majority of them are handling their debt service and pension obligations without breaking the budget.” The fact sheet makes the case, citing among other factors:
- Municipal bond defaults are rare. From 1970 through 2011, only five rated city or county governments defaulted. Of the 65 rated municipal bond defaults during this period, most were for not-for-profit hospitals or housing projects. Municipal securities are considered second only to Treasuries in investment safety.
- Most state and local pension systems have assets to weather the economic crisis, with nearly $3 trillion in pension trusts.
- Officials are working to improve their finances. State and local governments “have made changes to benefit levels, contribution rate structures, or both since 2009,” according to the news release.
The fact sheet argues against a federal law allowing states to declare bankruptcy, warning that “federal intervention in matters of state and local finance are unwarranted and unwelcome.” In addition to ICMA, organizations endorsing the fact sheet include the National Governors Association; National Conference of State Legislatures; The Council of State Governments; National Association of Counties; National League of Cities; U.S. Conference of Mayors; National Association of State Budget Officers; Government Finance Officers Association; National Association of State Auditors, Comptrollers and Treasurers; and the National Association of State Retirement Administrators.