MyGovCost News & Blog

As we noted, University of California president Janet Napolitano has been beating the drum for tuition hikes while maintaining a secret slush fund of $175 million, California’s state auditor recently revealed. As Republican assemblyman Dante Acosta pointed out, Napolitano’s office spent the hidden money “on things such as administrator bonuses and renovating the homes of campus chancellors,” but criticism of Napolitano, a Democrat and former governor of Arizona, was bipartisan. “President Napolitano is not worthy of the public’s trust,” explained Democratic assemblywoman Sharon Quirk-Silva. “It’s time she resigned.”

The case is strong, but the UC Regents aren’t having it.

“I was delighted when I found out we had a chance to have Janet Napolitano as our president. I’m still delighted,” Regent Norm Pattiz explained. For Regent Bonnie Reiss, “Seeing how some in the press have characterized it as a slush fund or a secret fund hurt my heart.” Actually, the press was right. It was a slush fund and it was secret. Regent Sherry Lansing targeted media “distortions” that claimed Napolitano had done anything wrong and proclaimed, “Her leadership of UC has been incredible.” Taxpayers, legislators and students alike might wonder what leadership Lansing is talking about.

From 2009 to 2013, Janet Napolitano headed the federal Department of Homeland Security, but she fails to maintain order and civil discourse on campuses such as UCLA where free-speech advocates are under fire. UC Berkeley explodes into violence over any speaker less than worshipful of political correctness, but president Napolitano looks the other way. She has made no cuts in the UC’s vast bureaucracy and beats the drum for tuition hikes while secretly hoarding $175 million. As assemblywoman Quirk-Silva contends, Janet Napolitano is not worthy of the public trust and it’s time she resigned. By hiring and retaining this corrupt non-leader, the Regents have made the UC presidency a sinecure for a political hack who got her start smearing the African American Supreme Court nominee Clarence Thomas.

The state of Connecticut’s fiscal outlook took a sharp turn for the worse this week. Following the state’s sharp plunge in income tax revenues earlier this month, which prompted the state to completely drain its rainy day fund and to modestly cut the state government’s budget, the state’s growing debt burden and pension liabilities have combined with poor economic growth prospects to prompt all three major U.S. credit rating agencies to downgrade the Nutmeg State’s credit rating.

S&P Global Ratings downgraded the state of Connecticut on Wednesday, becoming the final of the big three Wall Street credit rating agencies to drop the state into single-A territory because of a huge revenue slump and mounting economic weakness.

Moody’s Investors Service cut the state’s credit rating on Monday, and Fitch Ratings downgraded it on Friday.

That makes Connecticut one of the lowest-rated states in the country, with Fitch and Moody’s ranking only Illinois and New Jersey worse. For S&P, Connecticut is now rated A+ with a stable outlook, fourth worst behind Kentucky.

Connecticut Governor Daniel Malloy on Monday proposed slashing more expenses to help close a $390 million budget shortfall. He previously said the state would also need to drain its reserve fund and sweep in one-time revenues from other funds.

The downgrade to Connecticut’s credit rating means that it will cost the state more to borrow money because it will have to pay higher interest rates, which in turn means that it will have less money available to spend because it will have to dedicate a larger amount of its tax revenues to pay the interest it owes to the institutions that might loan the state money.

Connecticut offers an interesting case study because the state has sought to deal with its deteriorating fiscal condition by imposing increasingly higher and more progressive income taxes upon the state’s highest income earners without restraining the growth of its spending. In doing so, the state has become more and more dependent upon how well its top income earning residents do each year to fund the state government’s programs, which given how volatile the incomes are for top income earners, puts them at an increased risk of fiscal crises whenever they might have a bad year. Or if they or their employers move away for better economic prospects.

The question remains: After the U.S. territory of Puerto Rico’s precedent-setting bankruptcy filing, will it be Illinois or will it be Connecticut that becomes the next state-level government to follow suit?

Last December, California governor Jerry Brown signed AB 1570, authored by former Republican assemblywoman Ling Ling Chang. Chang’s measure alters the state’s “autograph law,” formerly limited to sports memorabilia, to include any signed item worth more than $5, including books.

As Anastasia Bolden of the Pacific Legal Foundation notes, this makes it “extremely risky, if not impossible,” for Book Passage, a Bay Area bookstore, “to continue selling autographed books or hosting author events.” Book Passage has hosted signing events for Bernie Sanders, Ralph Nader, Caitlyn Jenner, Charles Krauthammer and other high-profile authors, along with local writers, poets and cookbook authors. The shop must now provide a “certificate of authenticity” and keep it for seven years. Even an inadvertent omission can subject a seller to “outrageous penalties” including: actual damages, plus a civil penalty of up to 10 times the damages, plus court costs, plus reasonable attorney’s fees, plus expert witness fees, plus interest.

The National Law Review, in an article headlined “California’s New Autograph Law: Not What I Signed Up For,” warns of similar perils for art dealers, who “should not wait to learn the law applies to them until it is too late.” PLF is challenging the “poorly written” and “overbroad” measure in court, but Anastasia Bolden is too kind.

Government has no role in the bedrooms of the nation or the bookstores of the nation. Legislators should “make no law” like AB 1570 but Ling Ling Chang did and Jerry Brown duly signed it. Chang lost her state senate race and her bill is a loser for authors, readers, booksellers, and freedom of expression in general. Bolden knows who the winners are, as she explains: “professional plaintiff’s lawyers must be chomping at the bit.”

As anybody looking for a house or apartment can easily verify, California is in the throes of a housing crisis. In Oroville, for example, many low-income residents live in 1960s-vintage housing built for dam construction workers. Across the state, home ownership rates are the lowest since the 1940s and according to California’s Housing Future: Challenges and Opportunities, from the California Department of Housing and Community Development, the annual 80,000 new homes over the past ten years falls far short of the 180,000 needed. Politicians have started to take notice.

More than 100 housing bills now jostle in the legislature, and according to Sara Libby of Voice of San Diego, “California Democrats are uniting against a common enemy who they believe is making residents miserable and imperiling the state’s future. The target: NIMBYs across the state who continually shoot down new housing projects, and the localities that bend to their will.”

For Joe Mathews of Zócalo Public Square, “The state of California has begun a takeover of local housing policy,” and the more than 100 bills “clearly signal the state’s intention to take a leading role in how California houses itself.” Such intervention is usually worrisome, he explains, but this one should be welcome because it forms “the last, best hope for pressuring the biggest obstacles to new housing – local governments – to get out of the way.”

In reality, government at all levels is the biggest obstacle to housing, and with state government taking “a leading role,” the crisis will only get worse, as Mathews appears to understand. “Some of the more than 100 housing bills could make the shortage worse,” he warns, “by adding to the costs of housing or creating disincentives for local governments to approve housing.”

Sara Libby recalls that during the recession, “government was the only entity doing any building,” and market-rate projects were abandoned. Government should get out of the way and let the housing market function. That will provide the housing Californians need and help fuel an economic recovery.

A good place to start would be to eliminate the California Coastal Commission, an unelected body that runs roughshod over property rights and overrides the voters on land-use issues. CEQA, the state’s onerous environmental law, also blocks housing development and adds delays and costs. Legislators have failed to reform this institutionalized regulatory zealotry, a major cause of the housing crisis.

As of May 11, 2017, the total public debt outstanding of the U.S. government exceeds $19.8 trillion.

Political Calculations provides a summary of the major interests to whom the U.S. owes all that money, as of the end of the U.S. government’s 2016 fiscal year on September 30, 2016, when the national debt total stood at just shy of $19.6 trillion:

One of the crazier things about the U.S. national debt is that it often takes a lot of months after the end of a given fiscal year for the U.S. Treasury to sort out who the U.S. federal government owes money, particularly when when that money is owed to foreign entities.

So here we are, just over halfway through the federal government’s 2017 fiscal year, before we have a good idea of how much U.S. government-issued debt was held by its major foreign creditors at the end of the U.S. government’s 2016 fiscal year, which ended on 30 September 2016! The following chart reveals who the biggest holders of the U.S. national debt were as of that time:

FY 2016: To Whom Does the U.S. Government Owe Money?

Officially, the U.S. government’s total public debt outstanding is divided up into two parts: the “Public” portion of the national debt….

And the so-called “Intragovernmental” portion of the national debt, where the latter category represents money owed to various trust funds established and operated by the U.S. government.

Right now, we can see that Social Security’s Old Age and Survivors’ Insurance Trust Fund accounts for a little over half of the Intragovernmental portion of the U.S. national debt, which works out to be nearly $2.8 trillion, or about one-seventh of the U.S. government’s total public debt outstanding.

If Social Security’s Trustees are right, that number will steadily shrink to zero over the next 17 years, as that debt is cashed in to pay retirement benefits to Social Security recipients. When that number does reach zero, Social Security’s Trustees have indicated that the program will be forced to revert to the program’s original Pay-As-You-Go basis, where benefits can only be paid out of the payroll taxes that fund Social Security. When that happens, they predict that all Social Security benefits will need to be cut by 21%, unless Social Security’s payroll taxes are increased from 12.4% of earned income (which is currently equally split between employers and employees) up to 15.78% of earned income.

If you would like to see more detail on who the U.S. government owes money to, and also what countries owe the U.S. government money, Jeff Desjardins of Visual Capitalist has an interesting infographic that explores that data.

Everybody’s talking about President Trump’s firing of FBI director James Comey, and some consider the dismissal improper. On the other hand, as Michael Corleone might say, “Where does it say you can’t fire the head of the FBI? I am talking about an FBI boss who overstepped his authority, who got mixed up in a candidate’s email scandal, and who got what was coming to him. Now that’s a terrific story.” That is true, and there’s a lot more to the story. As it happens, Comey has a long history of carrying water for the Clintons. Trump was right to fire him, but one has to wonder why the president has not fired many others, particularly in the Internal Revenue Service.

As Kimberly Strassel of the Wall Street Journal notes, after the Citizens United ruling, “the IRS deliberately put some 400 conservative organizations, representing tens of thousands of Americans, on political ice for the 2010 and 2012 elections.” Louis Lerner took the fifth and no surprise that the previous administration failed to fire anybody. John Koskinen became IRS boss in 2013 and handed out bonuses while obstructing investigators at every turn. Calls have been ringing out for the president to fire Koskinen, but he has not done so. Perhaps that is because back in 1975, when Koskinen was vice president of the Palmieri Company, he handled the sale of the Commodore Hotel for rising star developer Donald Trump.

The National Security Agency could also use some cleanup. As Mary Theroux noted, the NSA has been grabbing every domestic communication. Those who conducted the warrantless searches should be shown the door, but no such reports have surfaced.

Meanwhile, James Comey is a good start but the federal government, with its massive waste, fraud and abuse, remains a target-rich environment. To paraphrase the late Don Rickles, the president should make himself at home and start firing more high-profile people, starting with John Koskinen. Few if any taxpayers will object.

When the U.S. territory of Puerto Rico filed for bankruptcy last week, we took the opportunity to identify the most likely candidates among U.S. states to follow the new legal precedents that are now being set by its example. The editorial board of a leading newspaper in one of those states, Illinois, argues that Puerto Rico’s bankruptcy filing represents the “frightening ghost” of that state’s debt-laden future.

Here are some excerpts from the Chicago Tribune‘s editorial. They first set the stage:

Puerto Rico is the terrifying Ghost of Illinois Future: a worst-case example of what happens when a government no longer can pay its bills.

The island, an American territory, is weighed down by $123 billion in bond and pension debt it cannot afford. Illinois, meanwhile, has about $130 billion in unfunded pension obligations alone, plus billions more in retiree health care and other liabilities. The circumstances are different, but no government can function properly — indefinitely — under ever-rising debt. Eventually something gives.

The day of reckoning for Puerto Rico came Wednesday when the island filed for a form of bankruptcy court protection — an emergency action unprecedented for a U.S. state or territory.

The editors go on to explain why the prospect of a state-level government going bankrupt should be terrifying to the state of Illinois:

Puerto Rico is what a debt-fueled nightmare looks like. Total indebtedness includes $74 billion in bond debt and $49 billion in unfunded pension obligations. The road to ruin traces back to a 2006 recession that never ended. To make up for budget shortfalls, the government borrowed … and borrowed. As Puerto Rican joblessness increased, tens of thousands of residents left for the mainland, further eroding the economy. “People sometimes just leave the key in the house or the car in the airport and just go,” a resident told The Wall Street Journal. Last March, the struggling power company temporarily shut off electricity to a hospital that couldn’t pay its bills. Talk about a Dickensian scene.

Let’s see: vast government borrowing, and outmigration removing taxpayers from the workforce. Sound familiar?

The Chicago Tribune‘s editors next consider what would happen if Illinois’ fiscal situation were to continue deteriorating and the state followed Puerto Rico’s path.

If bankruptcy protection became an option, bondholders would charge punishing interest rates, or quit buying Illinois bonds, because of the increased risk that the state couldn’t make its interest payments. Just the specter of Puerto Rico is chilling. “I think it will make life more difficult in places like Illinois and New Jersey and Connecticut, where investors are already reluctant to loan the government money,” Matt Fabian of Municipal Market Analytics told USA Today. “It’s going to increase investor trepidation.”

What the editors are describing is what happens when a government’s debt has entered into a debt death spiral, when the economy is crushed as both investors and residents are compelled to become refugees as the government becomes increasingly tyrannical in its attempts to take more and more to prop itself up while providing less and less of the things people count on the government to do.

We can see that happen on a state-level scale with the example of Puerto Rico, where the New York Times‘ Frances Robles describes the kinds of sacrifices that those who remain in Puerto Rico will be compelled to make after the bankruptcy filing:

Although the move on Wednesday was hardly a surprise, it left a sense of gloom and anxiety here, as civil servants question whether their pensions will ever be paid and private companies suffer the consequences of the brutal domino effect that results when taxes rise, salaries drop and the middle class takes off on a mass exodus for Florida….

The government plans sweeping austerity measures in the coming months that will hit teachers especially hard. On Friday, Puerto Rico’s education secretary announced a proposal to close 184 schools. Teachers may see their hours trimmed by two days a month.

So while the government seeks protection from lawsuits from the hedge funds and other financial firms that invested in Puerto Rico’s risky debt, residents of this United States territory are taking the squeeze. Fines for parking and other traffic violations have doubled. Dozens of government agencies are on the chopping block, while perks like the annual Christmas bonus and pay for unused sick time make for wistful memories.

Illinois isn’t there yet. The Chicago Tribune‘s editorial board offers that state’s government some advice for learning from Puerto Rico’s wake up call.

The right response for Illinois is to look at the ruin of Puerto Rico and take its fate as a dire warning: This state has an unsustainable debt load. Eventually it will overwhelm government and taxpayers. No plan to reform the economy to spur growth and create more taxpayers. A $12 billion backlog of unpaid bills. Only gridlock and infighting as the debt load grows. But it is not too late for Illinois to change its ways.

And there’s the problem. Illinois wouldn’t be a leading candidate to be the next state-level government in the U.S. to pursue federal bankruptcy protections if its legislators were truly willing to fix the state’s fiscal problems, for which they bear full responsibility for having created.

Until that changes with the state’s politicians putting aside their own petty interests in asserting their long-entrenched power, Illinois will continue following Puerto Rico’s path. Until it can no longer avoid its fate.

“House Approval Of Health Care Bill Represents Major Victory For Trump,” ran the headline on a National Public Radio story, and the Washington Post said the new bill was a “major victory” for Republicans. Whether the measure, yet to face the Senate, is a victory for the people is dubious at best.

The Affordable Care Act, which the Republicans say they want to repeal and replace, was a statist coup disguised in a white coat. Under this plan, the people don’t get the health care they want. Instead they get only the care the government wants them to have. The ACA was responsible for “widespread consumer misery,” and prompted victims to wonder if the ACA was just laying groundwork for what Hillary Clinton calls the “public option” or “single payer.” Both mean government monopoly health care, what some politicians persist in calling “socialized medicine.”

Hillary Clinton failed to win the election but the effort to repeal the ACA is really a victory for the 44th president, who understood the dynamic of the bipartisan ruling class. Liberal and left-wing Democrats take the lead in the expansion of government, as in the FDR’s New Deal and Lyndon Johnson’s Great Society, with its vaunted “War on Poverty” that proved particularly destructive. Republicans have been in a position to scale back or eliminate these statist programs but declined to do so. Instead they do their best to “fix” or “repair” them, to “make them work,” and so on.

Like the ACA, you have to pass the Republican bill to find out what’s in it. Like the ACA, it shapes up as government giving people the health care it wants them to have. On the other hand, for the people got the health care they want and need, competition is the best mechanism. Television ads for health insurance should be common as ads for car insurance, but don’t look for that anytime soon.

Meanwhile, the socialist Bernie Sanders is pushing for California to adopt “single payer,” the kind of system they had in the USSR, where Sanders spent his honeymoon. The prime beneficiary of government monopoly health care would be government employee unions. True to form, appearing with Sanders was RoseAnn DeMoro of the national nurses union. Sanders claims health care is a “right” but as John Graham has noted, there is no right to health care even in Canada’s government monopoly system.

One of the little known perks of being appointed to head one of the major departments of the U.S. government is that you can have your official portrait painted to become an immortal part of the government’s growing collection of artwork.

James Varney of RealClearInvestigations reports on the downside for U.S. taxpayers of that practice.

In late 15th century Florence, members of the fabled house of Medici paid artists such as Sandro Botticelli to produce portraits of themselves worthy the world’s greatest museums. Today American taxpayers spend millions of dollars on portraits of government bureaucrats.

Most are hidden from public view, which may be a blessing, according to Sen. Bill Cassidy, R-La., who notes, “I’m not so sure the public cares who the secretary of agriculture was 10 years ago.”

Cassidy wants to end such indulgences permanently. In recent years, he has managed to attach a rider to appropriations bills barring the use of public money for portraits of Washington officials. Now’s he’s aiming to stop it outright with his Eliminating Government-Funded Oil Painting Act, or the EGO Act, which recently passed out of the Senate’s Homeland Security and Government Affairs Committee. The act’s cheeky acronym captures what’s really at play so far as Cassidy is concerned.

“We’re not against portraiture, and we understand a painting of a president, say, might be priceless,” he said. “But you can’t tell me we should pay for a portrait of an EPA director that hangs in some back hallway where people can’t find it or the public doesn’t have access.”

Cassidy’s mention of the portrait of an EPA director isn’t random. Back in 2012, Representative Cassidy sent his communications director on a mission to find the government-commissioned portrait of President Obama’s first EPA director Lisa Perez Jackson, who occupied that post during his first term in office.

While you can see photographs of the unique portrait on the web site of Portrait Consultants, the firm that was commissioned to produce it, and even pictures of Jackson visiting the portrait studio to select a frame for it, it proved to be difficult to find after it was delivered to the federal government.

In 2012, when then-Rep. Cassidy first pushed a law banning the portraits, his communications director, John Cummins, went looking for the painting of EPA head Lisa Jackson, which cost taxpayers $40,000. He couldn’t find it. And that was with his congressional ID.

“The security guard had no idea what we were talking about,” Cummins said.

Eventually, the painted portrait of Jackson turned up, but nowhere the public who paid $38,350 for it and its frame in 2012 could view it.

Cassidy, who has been seeking to end the federal financing of such vanity portraits for years, has once again reintroduced legislation with bipartisan support earlier this year. The primary supporters of the Eliminating Government-Funded Oil-Painting (EGO) Act of 2017 make their arguments in the press release announcing the bill’s introduction:

WASHINGTON—US Senators Bill Cassidy, MD (R-LA), Ron Johnson (R-WI), Claire McCaskill (D-MO), and Deb Fischer (R-NE) introduced the Eliminating Government-Funded Oil-Painting (EGO) Act of 2017 in the US Senate.

“When America is trillions of dollars in debt, we should take every reasonable measure to reduce the burden passed on to our children and grandchildren,” said Dr. Cassidy. “Tax dollars should go to building roads and improving schools—not oil paintings that very few people ever see or care about. Congress has passed the EGO Act before, let’s pass it again.”

“Banning government officials from spending taxpayer dollars on expensive self-portraits is a no-brainer, and a great step toward draining the Washington swamp,” Sen. Johnson said. “I look forward to continuing to use the Homeland Security and Governmental Affairs Committee to eliminate government waste wherever possible.”

“I’d encourage anyone who’s commissioned a portrait using Missourians’ hard-earned tax dollars to come back to my state with me and ask folks how they feel about it—they’ll get an earful,” McCaskill said. “This bill just says you should pay for your own portraits and not ask taxpayers to foot the bill. I can’t imagine anyone who’d disagree with that.”

“The EGO Act would save taxpayer dollars by cutting frivolous spending on lavish portraits of government officials. Congress has a responsibility to conduct proper oversight and root out all forms of government waste. It’s pretty simple: if you want a portrait, pay for it yourself,” said Fischer.

The last time the bill was introduced back in 2015, it was blocked, without any statement of justification, by then-minority leader Harry Reid of Nevada, who has since retired from the Senate.

The portraits cost anywhere from $20,000 to $40,000 apiece. The federal government has hundreds of them in its collections, as this limited selection of federally-commissioned portraits makes clear.

The EGO Act of 2017 is a bill whose time is long past due. Today’s members of the Senate and the House have an opportunity to demonstrate that they’re willing to set aside the publicly-financed demonstration of their egos to benefit millions of American taxpayers, many of whom would never consider wasting their money on having their own portraits painted, much less those of government bureaucrats.

The U.S. territory of Puerto Rico is the oldest colony in the world. Part of the United States since 1898, the Caribbean island with a predominantly Spanish-speaking population of over 3.7 million has often been promoted as a candidate to become the nation’s 51st state.

But May 3, 2017 marked the beginning of a new era for the island, coming over 523 years after being discovered by Christopher Columbus during his second expedition to the New World, as Puerto Rico’s territorial government filed for bankruptcy, just over one year after it first defaulted on paying its debts, and nearly 10 months after it began defaulting on its constitutionally guaranteed debt. Reuters describes the magnitude of the event and what finally touched it off:

Puerto Rico announced a historic restructuring of its public debt on Wednesday, touching off what may be the biggest bankruptcy ever in the $3.8 trillion U.S. municipal bond market.

While it was not immediately clear just how much of Puerto Rico’s $70 billion of debt would be included in the bankruptcy filing, the case is sure to dwarf Detroit’s insolvency in 2013.

The move comes a day after several major creditors sued Puerto Rico over defaults [of] its bonds.

The government of Puerto Rico’s day of reckoning had been delayed for a year after it first began defaulting on paying back its credit because of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which President Obama signed into law on June 29, 2016. From that time, the territorial government had until May 1, 2017 to negotiate settlements with its creditors, primarily hedge and pension funds, who had been enticed to loan money to Puerto Rico because of high interest rates and the territorial government’s constitutional guarantee to pay back money it borrowed.

When that deadline passed without deals to either settle the claims of its creditors or sufficient tax revenue to make payments on its debt, the future of Puerto Rico in U.S. bankruptcy court was all but assured, as the PROMESA law made it possible for the first time for a U.S. territory or state to file for bankruptcy protection from its creditors.

In this case, the law allows the government to force the restructuring of its debts under Title III of the U.S. bankruptcy code, much like the kind of bankruptcies that have been filed by smaller units of government such as cities and counties.

With filing for bankruptcy now an option and Puerto Rico taking the lead in setting the legal precedents for the equivalent of state-level governments, there’s some interesting speculation on which U.S. state might be the next to seriously pursue the option. Analyst Mike Shedlock makes the case for Illinois to be next, given that state’s completely dysfunctional legislature combined with its enormous public employee pension liabilities.

Meanwhile, accounting firm PriceWaterhouseCooper includes Massachusetts, Connecticut, Kentucky and New Jersey along with Illinois at the bottom of its listing of the relative financial strength of the states, but notes that Puerto Rico would be “ranked last by a wide margin”. Meanwhile, Eileen Norcross and Olivia Gonzales of the nonprofit Mercatus Center place the same five states at the bottom of their 2016 rankings of U.S. states by their government’s fiscal condition, giving the following reasons:

Kentucky, Illinois, New Jersey, Massachusetts, and Connecticut rank in the bottom five states, largely owing to the low amounts of cash they have on hand and their large debt obligations.

• Each state has massive debt obligations. Each of the bottom five states exhibits serious signs of fiscal distress. Though their economies may be stronger than Puerto Rico’s, allowing them to better navigate fis­cal crises, their large liabilities still raise serious concerns.
• Unfunded liabilities continue to be a problem. High deficits and debt obligations in the forms of unfunded pensions and healthcare benefits continue to drive each state into fiscal peril. Each holds tens, if not hundreds, of billions of dollars in unfunded liabilities—constituting a significant risk to taxpayers in both the short and the long term.
• The bottom five states have changed since last year. Kentucky’s position has declined, plac­ing it in the bottom five this year. New York is no longer in the bottom five. New Jersey and Illinois improved slightly, but remain in the bottom five. Connecticut and Massachusetts also remain in the bottom five, in slightly worse positions than last year.

Of these states, Connecticut might the most likely to provide serious competition to Illinois in the unofficial race to be the next state-level government to file for bankruptcy, given the breaking news that its highly progressive income taxes are failing to deliver anticipated revenues to that fiscally-strained state government.

Which state would you predict will be the next to head to U.S. federal bankruptcy court?