New England is often referred to as “The Land of Steady Habits.” Apparently one steady habit in the northeast states is to commit to government employee pensions without the means to pay for them.
Nationwide, states’ pension liabilities were unfunded in 2008 to the tune of about $450 billion, according to a study by the Pew
Dealing with unfunded pension liability is not the sexiest of campaign platforms for a gubernatorial candidate, but at a Connecticut fundraiser this past Sunday for Nelson “Oz” Griebel, the Republican candidate made it clear it was among his top priorities. And although there was not a wet eye in the house, at least one baby boomer in the crowd was thinking, “What if they can’t pay the bill in a few years?”
Anyone with equity in their northern home and a desire to move has lots of good reasons to head south. Climate is one obvious reason. As I’ve indicated many times before, overall cost of living improvement is another. Add to that an expectation by demographers of a continuing migration north to south, with the consequent higher price appreciations in home values in the south. But now, with the economic stress many states are enduring, state funding for such commitments as pensions becomes another good reason to consider a move south sooner rather than later. It may be unthinkable to consider a state like California or Connecticut going bankrupt, but if a state can’t pay its bills, the consequences will trickle all the way down to home values.
In the southeastern U.S., South Carolina, Alabama and Mississippi are only a notch better than the New England states cited above, with between 70% and 78% of funding accounted for pension liabilities. But Tennessee, North Carolina, Georgia and Florida are demonstrably more stable when it comes to funding their own state pensions, with 91% to 107% of their liabilities “in the bank.”
If you are contemplating a move south, even if it is years away, contact me and I will be pleased to help you consider all the criteria that are important to consider in making the move.
