Two new reports by the Pew Charitable Trusts suggest that state governments across the country are shortchanging their employee pension funds and aren’t adding enough money in emergency funding accounts to prepare for the next economic crisis or recession.
While states have recouped much of the fiscal and economic ground they lost during the Great Recession, not all have them have rebounded, according to the non-partisan research organization. What’s more, there is considerable uncertainty over how President Trump’s agenda for federal tax reform, trade and health care will impact the states.
Mishandling hundreds of billions of dollars of pension funds and draining emergency spending accounts could pose serious problems for governors and state legislators when the next big economic crisis hits.
“It’s a missed opportunity,” Jonathan Moody, a states’ fiscal health expert with Pew said on Thursday in discussing the emergency accounts. “If you could be saving that money, and then you spend it instead – and in fact even draw on the funds further –the next time that the economy would turn south, you’re stuck with less money as a whole.”
– The Fiscal Times