[US] Total state debt tops $5 Trillion
From Newsmax
A troubling new report discloses that the total debt facing U.S. state governments now stands at $5.1 trillion — equal to about $16,180 for each state resident.
Total debt amounts to one-third of annual gross state product, and 469 percent of all fiscal year state general and other fund revenues, according to the report from State Budget Solutions (SBS).
“Since 2010, SBS has conducted a comprehensive examination of debts facing the 50 state governments,” the report explains. “These reports have repeatedly found trillions in combined debt that stand in stark contrast to officials’ proclamations of balanced budgets and belt-tightening.”
SBS calculates state debt based on four components: unfunded public pension liabilities; outstanding government debt, including bonds and leases; unfunded other post-employment benefit liabilities (OPEB), mainly retirees’ health benefits; and outstanding unemployment trust fund loans from the federal government.
Unfunded public pension liabilities stand at $3.9 trillion. Outstanding debt totals $618.8 billion. Unfunded OPEB liabilities in the 50 states stand at $528.7 billion; and unemployment trust fund loans total $19.9 billion, according to SBS.
California leads all states with $778 billion in debt, due largely to its $584 billion unfunded public pension liability. New York is next with $388 billion in total debt, followed by Texas with $341 billion, and Illinois and Ohio, each with $321 billion.
The only states with debt under $10 billion are South Dakota ($7.7 billion), Vermont ($7.8 billion), North Dakota ($9.2 billion), and Wyoming ($9.9 billion).
In per capita terms, Alaska’s debt amounts to $40,714 per person, Hawaii’s is $33,111, and Connecticut’s is $31,298. The lowest per capita debt is in Tennessee, $6,358.
Nevada’s state debt stands at 1,048 percent of its fiscal year 2012 spending, and Hawaii’s debt amounts to 64 percent of its gross state product.
“Over time, state debt will exact a toll on state budgets,” SBS observes. “Money once expected to fund vital services like education and healthcare will have to be redirected to debt service, increased contributions to public pension systems, and more.”
Related:
Pressure builds for lifting U.S. oil export ban
From Newsmax
With a boom in U.S. oil production in full swing, and the Keystone XL pipeline’s approval chances improved, some are calling for lifting oil export restrictions that have been in place for decades.
Republican strategist Michael McKenna, president of the lobbying firm MWR Strategies, expects that pressure will build on President Obama to lift restrictions that were set in place after the oil embargo in the 1970s.
“If you don’t start exporting here shortly, you’re going to wind up in a situation where you’re going to have to shut in some production,” he told Roll Call. “It’s going to be difficult for the administration to explain why that’s a good idea.”
If the president doesn’t act, he likely will see governors and mayors “complain about lost tax revenue and oil workers will be laid off,” McKenna added.
But Obama is “going to get enormous pressure from his environmental crew not to do that,” he said, just as the president has faced heavy pressure from environmental groups not to approve the Keystone XL pipeline.
U.S. oil production has been robust due to hydraulic fracturing and horizontal drilling techniques that have enabled energy producers to tap into supplies trapped in shale-oil fields, especially in North Dakota and Texas.
The U.S. Energy Information Administration (EIA) says the country is likely to produce 8.42 million barrels of crude oil daily this year, up from 7.44 million barrels in 2013, and 9.19 million barrels a day in 2015.
That would be close to the all-time high for U.S. oil production: 9.6 million barrels a day in 1970.
The EIA also forecasts that net imports of oil and oil products will account for just 25 percent of U.S. demand by 2015, down from more than 60 percent of domestic demand in 2005.
American refineries in recent years have added expensive technologies to process heavy oils from Venezuela and Mexico. So they stand to make more money by processing heavy crude — the kind that would be shipped through the Keystone pipeline from Canada’s tar sands to Gulf Coast refineries.
Jorge Pinon, director of the Center for International Energy and Environmental Policy at the University of Texas at Austin, told Roll Call that “by having access to that Canadian crude, you have now a new economic incentive to export crude oil.
“We’re going to be exporting refined products for quite a while. That’s where the need is.”
Republicans in late January demanded that President Obama approve the long-stalled Keystone pipeline after a State Department report disclosed that the project’s impact on climate change would be minimal.
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