Saturday, January 8, 2011

Pension Fund Losses Hit States Hard, Data Show

When total state government revenues across the nation plummeted by a record-breaking 30.8 percent in 2009, the steep investment losses of pension funds proved to be an even bigger drain on state coffers than recession-battered tax collections, according to census data released Wednesday.

States reported $1.1 trillion in total revenues in 2009, down from $1.6 trillion a year earlier — the steepest drop the United States Census Bureau has reported since it began collecting data on state government finances in 1951.

Tax collections fell by $66 billion, blowing a hole in the operating budgets of many states. But the biggest losses will be felt only in the future: states reported a $477 billion decline in what the census calls “insurance trust revenue,” mostly from pension funds but also from funds for unemployment insurance and workers’ compensation.

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