About News Scheppach: COVID-19 Will Turn the State Pension Problem Into a Fiscal Crisis Jun 16, 2020 Raymond Scheppach Scheppach: COVID-19 Will Turn the State Pension Problem Into a Fiscal Crisis You may be wondering why, over the last few months, the state pension problem – normally not a subject of widespread discussion – has been in the news. In fact, you may be wondering just what the state pension problem is. The problem – and it’s a big one – is that many of the public employee pension plans run by states don’t have enough money in them to make upcoming pension payments to retired state workers. The first time the subject came up recently was toward the end of February. That’s when teachers in Kentucky called a sick-out and protested various pension changes advocated by the state legislature. Kentucky’s public pension plans are among the worst-off financially of all the state systems, with only enough money in them to cover 34% of future pension payments as of 2017. Then, in late April, five GOP senators wrote to the president to say they didn’t want the federal government to give additional aid to states hard-hit by COVID-19. “We believe additional money sent to the states … will be used to bail out unfunded pensions, reward decades of state mismanagement, and incentivize states to become more reliant on federal taxpayers,” they wrote. The senators’ sentiments were echoed by many in the Senate Republican leadership, including Senate Majority Leader Mitch McConnell, who said, “There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.” The problem has been a long time coming, but COVID-19 may make it into a crisis. Read in The Conversation Raymond C. Scheppach Ray Scheppach is a professor of public policy at the Frank Batten School of Leadership and Public Policy and currently holds a joint appointment at UVA's Miller Center. Scheppach is a national expert on federalism and the role of states in our inter-governmental system and studies the role of governors as leaders on domestic policy issues. Read full bio Related Content Raymond C. Scheppach The Intergovernmental Grant System Research State and local government fiscal systems have increasingly become vulnerable to economic changes. Over the past three decades, state and local deficits during economic recession have been larger and deeper each time. New Roles for States in Health Reform Implementation Research State policies and implementation practices will largely determine whether the new federal health reform law translates into more affordable coverage and access to health care services. States will play particularly important roles with respect to Medicaid expansion, the creation of insurance exchanges, and the new market rules for insurance. Ray Scheppach on Virginia's State Budget Process News Batten professor Ray Scheppach shares his knowledge on the Virginia state budgeting process as a guest on the WTJU podcast Bold Dominion. Did US States Get More Money Than They Needed for COVID-19 Relief? News Interviewed for The Conversation, Batten’s Raymond Scheppach says the flood of federal money may have been a rare occurrence in federal-state relations: too much of a good thing. Stay Up To Date with the Latest Batten News and Events Subscribe
Raymond C. Scheppach Ray Scheppach is a professor of public policy at the Frank Batten School of Leadership and Public Policy and currently holds a joint appointment at UVA's Miller Center. Scheppach is a national expert on federalism and the role of states in our inter-governmental system and studies the role of governors as leaders on domestic policy issues. Read full bio
The Intergovernmental Grant System Research State and local government fiscal systems have increasingly become vulnerable to economic changes. Over the past three decades, state and local deficits during economic recession have been larger and deeper each time.
New Roles for States in Health Reform Implementation Research State policies and implementation practices will largely determine whether the new federal health reform law translates into more affordable coverage and access to health care services. States will play particularly important roles with respect to Medicaid expansion, the creation of insurance exchanges, and the new market rules for insurance.
Ray Scheppach on Virginia's State Budget Process News Batten professor Ray Scheppach shares his knowledge on the Virginia state budgeting process as a guest on the WTJU podcast Bold Dominion.
Did US States Get More Money Than They Needed for COVID-19 Relief? News Interviewed for The Conversation, Batten’s Raymond Scheppach says the flood of federal money may have been a rare occurrence in federal-state relations: too much of a good thing.