Taxpayers on the hook for $1 trillion in retiree benefits?

Just as they are contending with massive gaps in their operating budgets, states and localities must also deal with a $1 trillion deficit in public employees’ retirement benefits’ funds, a new report found.

The shortfall amounts to more than $8,800 for every household in the nation, according to the Pew Center on the States, which published its findings Thursday.

States largely got themselves into this mess by failing to make annual contributions while also enhancing benefits, the study found. Now, they are behind by a total $452 billion in their pension accounts and $555 billion in their retiree health funds, as of the end of fiscal 2008, which ended June 30 for most states.

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The deficit is likely even more severe because the report did not take into account the crumbling of the stock market in the latter half of 2008. The typical pension plan lost 25% of its value in 2008. [Read the full article]

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These filers, along with other taxpayers who fit into special categories, might be able to claim at least one of the dozen-plus deductions found directly on Form 1040. There’s no need to complete Schedule A, with its percentage-of-income thresholds and deduction phaseouts.Adjustments, not deductionsOfficially, these breaks are identified as adjustments to your income. But they are popularly referred to as above-the-line deductions because you subtract them on Page 1 of your 1040, just above the page’s last line — No. 37 on the 2009 return — where you enter your adjusted gross income, or AGI. [Read the full article]

The Virginia House of Delegates on Sunday proposed a dire new state budget that slashes Medicaid funding and eligibility, and increases school class sizes while reducing public school funding, while a competing Senate plan also calls for big cuts to Medicaid but restores many of the cuts to education.

The House Appropriations Committee voted 15-7 Sunday for a spending blueprint through 2012 that cuts about $1.5 billion compared with Republican Gov. Bob McDonnell’s suggested cuts last week topping $2 billion.

It rejects McDonnell’s proposal to impose five unpaid days off for state employees, spares further cuts to colleges, kills a proposed out-of-pocket employee retirement contribution and provides a 2011 Christmas bonus. [Read the full article]

Principal Financial Group said Monday board member William Kerr has resigned and will leave the board on Wednesday.

His appointment to CEO came as Arbitron announced the resignation of Michael Skarzynski in January.

Arbitron said Skarzynski told the House Oversight and Government Reform Committee that he had participated in a home visit to Arbitron panelists in November. While company officials did make the visit, Arbitron said Skarzynski did not attend.

The committee wants to know if Arbitron’s new method of tracking radio audiences undercounts minorities, an issue that has sparked lawsuits in at least three states.

Kerr has been a director at Principal Financial since 2001 and at Principal Life since 1995. Principal, based in Des Moines, Iowa, is a leading provider of 401(k) services and has insurance and financial services businesses. [Read the full article]

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