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Pennsylvania's Credit Rating Cut by Moody's on Budget

by Joe Mobley
3 replies
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From the "It's coming to your municipality soon" department:

"Large and growing pension liabilities coupled with modest economic growth will limit Pennsylvania's ability to regain structural balance in the near term," the company (Moody's) said.
Typical government thinking, "Let's get someone else to pay for their mismanagement."

a bill backed by Governor Tom Corbett that would shift some of the burden of funding retirement benefits to new state and school workers.
Oh happy day.

Joe Mobley
  • Profile picture of the author Kay King
    a bill backed by Governor Tom Corbett that would shift some of the burden of funding retirement benefits to new state and school workers.
    That's what happens when you placate the unions by promising future benefits you can't afford. Many states have done that in the past 20 years.

    The unions ask for more - that's their purpose. In private business, the employer would go only so far in promising wage hikes and benefits. That private business owner would KNOW where the line is for his profitability.

    State (and fed) govts don't seem to have that common sense. There is no bottom line so they promise more in the future without any thought of who will pay the price. You can only do that for so long before it catches up with you.
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  • Profile picture of the author Joe Stewart
    Originally Posted by Joe Mobley View Post

    From the "It's coming to your municipality soon" department:

    Typical government thinking, "Let's get someone else to pay for their mismanagement."

    Oh happy day.

    Joe Mobley

    Pennsylvania isn't the only place that's dropped the ball. I used to be allowed to give instant credit to municipalities at my former employer, but nearly all of my competitors are requiring credit applications from them now. Better safe than sorry.

    Even before the recession there were some municipalities that would push the envelope by going over 60-90 days to pay. Some places would place BIG orders, but take a long time to pay the bill. You had to make a decision whether the business was worth it or not.
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  • Profile picture of the author GforceSage
    Originally Posted by Joe Mobley View Post

    From the "It's coming to your municipality soon" department:

    Typical government thinking, "Let's get someone else to pay for their mismanagement."

    Oh happy day.

    Joe Mobley
    Too many pension plans and not enough new workers to outpace retirees.


    Many do not know it yet, but if you teach or work in California and pay into the states largest retirement fund, the state will begin taking another 2 1/4 % out of your check because the money is going backwards to pay everyone.
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