Are state governments really this destitute?

[Septimus]

I'm amazed by this news story about a serious Colorado government security loophole, with no plans to fix:

So far, at least 35 businesses in [Colorado] have had their corporate identities misused to open fraudulent credit accounts at retailers ...
The corporate identity thefts itself were possible because of what appears to have been a surprisingly wide open business registration system at the Colorado Secretary of State's Office. As with every other state, Colorado requires companies doing business in the state to register details of their business. Like other states, the business registration details, which include the name of the registered agent of the company, its full local address and other information, are a public record that can be viewed by anyone.

In Colorado's case, however, not only does the state allow anyone to view the record -- it also allows just about anyone to alter or update it. The state site requires no username or password for access to a company's registration information, which means that anyone with access to the site can make changes.

... For now, there are no plans to implement a username and password to control access to the data because the budget for that has yet to be approved. That will be discussed when Colorado's legislative session resumes in January. Coolidge estimated that the state will need to hire between five and seven additional employees to handle password help issues if tighter access controls are added.

Internet security loophole? Like "dog bites man", I guess that's not news. But leaving a gross loophole, because they don't have the budget to hire 5 employees? I wonder if Colorado businesses can sue their government for negligence.

 

[Wheelz]

I can't believe it takes 5 to 7 people to password-protect a database.

 

[howye]

I can't believe it takes 5 to 7 people to password-protect a database.

I think they are saying 5 to 7 people to handle password problems, once the password protection is in place. Which I find hard to believe also. Most every protected website has a password recovery feature.

Of course, why changes are allowed via the website when it is so obviously unsecure is beyond me. Turning off that ability should be within the technical skills of their existing IT staff.

And yes, states are that destitute. I can only speak to my state, but Ohio is forcing ten unpaid days off for workers, no raises, no personal days for many employees, and other items. State services have been dramatically cut in some areas, and there is no budget for new items.

 

[Zsofia]

South Carolina just bought some old school buses... from Kentucky. That's how broke we is.

 

[Really Not All That Bright]

I just thought you'd all like to know that I am now the CEO of the Newmont Mining Corporation. Who wants some aluminium?

 

[Northern Piper]

TIME article from last month on the issue of state indebtedness: In the U.S., Crisis in the Statehouses:

From Hartford to Honolulu, once sturdy state governments are approaching the brink of fiscal calamity, as the crash of 2008 and its persistent aftermath have led to the reckoning of 2010. Squeezed by the end of federal stimulus money on one hand and desperate local governments on the other, states are facing the third straight year of staggering budget deficits, and the necessary cuts will cost jobs, limit services and touch the lives of millions of Americans. Government workers have been laid off in half the states plus Puerto Rico. Twenty-two states have instituted unpaid furloughs. At least 28 states have ordered across-the-board budget cuts, with many of them adding deeper cuts in targeted agencies. And massive shortfalls in public pension plans loom as well.

Almost no one — and no place — is exempt. Nearly everywhere, tax revenue plummeted as property values tanked, incomes dwindled and consumers stopped shopping. Falling prices for stocks and real estate have made mincemeat of often underfunded public pension plans. Unemployed workers have swelled the demand for welfare and Medicaid services. Governments that were frugal in the past are just squeaking by. Governments that were lavish in the good times, building their budgets on optimism and best-case scenarios, now risk being wrecked like a shantytown in an earthquake.

 

[Kolga]

Yes, Colorado is that destitute. Last year, all state workers had to take 4-8 furlough days, and the state faced something like a 750M shortfall. Most of that was made up with slashes to education funding and state programs.

This year, all state workers are taking a 2.5% pay cut, and we're facing another 212M shortfall.

From The Center of Budget and Policy Priorities

Colorado faces another $212 million gap in its budget. The state likely will revisit cuts considered during the recent legislative session, but ultimately rejected. For instance, the legislature

 

[Really Not All That Bright]

$750 million? Ha! The Florida government is short $800 million in lost property tax revenue alone.

One benefit is that the state legislature looks as though it's going to start charging itself for health insurance.

 

[Kolga]

Yea, but y'all have about 18M people, and Colorado only has 5M

The 750M was down from a projected shortfall of 1B (both numbers from memory, may or may not be 100% accurate). And looks like I was wrong on the 212M - this article claims the shortfall next year will be 1.7B.

A huge percentage of our state budget is constitutionally mandated (because idiot voters think putting financial policy into the state constitution where it remains inflexible in times of crisis is a good idea), so the only places that can be cut in times of crisis are higher education and a few others. AND there's a constitutional amendment that the state cannot deficit spend - Colorado's state budget must be balanced every year.

 

[Frank]

A huge percentage of our state budget is constitutionally mandated (because idiot voters think putting financial policy into the state constitution where it remains inflexible in times of crisis is a good idea), so the only places that can be cut in times of crisis are higher education and a few others. AND there's a constitutional amendment that the state cannot deficit spend - Colorado's state budget must be balanced every year.

Doesn't the temporary de-Brucing expire this year as well?

 

[Kolga]

Doesn't the temporary de-Brucing expire this year as well?

Yes, but Referendum C actually permanently removed the ratchet-down effect, so that even when TABOR goes back into effect (which is adding to the projected shortfall), it should be slightly less horrific in the future.

And as an aside, Mr. Bruce is being charged with contempt after avoiding subpoenas to appear to answer questions about his unrevealed role in three ballot initiatives on this year's ballot, all of which would financially devastate the state.

 

[Really Not All That Bright]

I've been mulling over a variation of the "balanced budget" amendment. Since it doesn't leave any room for "proper" Keynesianism (ie., paying off deficit spending in times of crisis by running surpluses in good times) it creates as many problems as it solves.

However, I propose that state budgets be balanced over state congressional terms. For the purposes of explanation, we will assume that our guinea pig state has a unicameral legislature, with representatives elected to four year terms.

Each representative must pledge that the budget be balanced during his term. That means that he can deficit spend for two years, just as long as he runs a surplus for two years.

Any elected representative who fails to balance the budget during his tenure must work in a prearranged capacity for the state government or participating nonprofit for 1, 2, 3 or 4 years, depending on the shortfall.

At minimum wage.

 

[Kolga]

That's an interesting proposal, RNATB. I'm not completely averse to balanced budget amendments, but I feel that they lack the flexibility necessary to recognize changing financial and economic times. Much like you propose, I believe that states should be able to deficit spend for some years if they run a surplus other years.

I think of it this way - when a financial change causes an individual person or family to have to "deficit spend" (i.e., use credit cards, loans, savings, IRA funds, etc.), then generally that person or family uses times of stability to pay back those loans, pay down that debt, replenish savings, etc. (yea, yea, I know most Americans don't do this, but follow along with the analogy, please). We don't necessarily expect that the person who's just lost their job or had some other financial change must completely stop all spending in equal portions to their change. For example, someone who lost their job (and therefore has no income) isn't expected by most people to completely cease all spending of any kind immediately, especially if they have resources they can use. We allow for the possibility that people can take advantage of resources to tide them over, even while we DO expect some budgetary restrictions.

I think we should give governments the same flexibility, with protections to prevent them from doing it every single year.

 

[Really Not All That Bright]

In the specific case of states, which don't really do much stimulative spending, I don't think standard BB amendments are bad. They definitely don't work in conjunction with the other tax-prevention legislation you've got, though.