Credit ratings firm Standard & Poor’s gave Mississippi policymakers a warning last Tuesday that the state’s credit rating, which determines how much taxpayers will have to pay in order to borrow money, is in danger of a downgrade.
S&P said that the declining position of Mississippi’s defined-benefit pension system, the Public Employees’ Retirement System or PERS, and the state’s budgetary issues are two reasons for the downgrade.
PERS is clearly in trouble, but the Legislature hasn’t put the brakes on the slide by adding more money to the fund or changing its rules. According to the last annual report released by PERS in October, the number of retirees increased by more than 3,000 and the pension fund suffered a funding ratio drop from 60.4 percent to 60 percent. The math has been brutal for PERS, as the number of retirees has expanded 40.6 percent since 2007. The number of employees contributing to the plan has fallen from more than 157,000 in fiscal 2015 to 154,000 in fiscal 2016.
The problem with the state’s budget isn’t a revenue problem, but a spending problem.
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