Public Finance Spotlight: Liz Farmer

Liz Farmer reports on public finance in a comprehensible way - gets right to the point

This is part of my 2023 public finance focus project.

Spotlight on Liz Farmer, Public Finance Reporter

I just paid for a subscription to Liz Farmer’s Long Story Short substack last week.

(Mea culpa — I should have done it earlier!)

She had posted 5 things I’ve learned after a decade of reporting on municipal bankruptcy, which made me go look to see when I first had contact or wrote about her, which was in February 2015. She had contacted me about public pension accounting at the time, at which point I also made some introductions to other people I knew (at least one of whom is no longer with us, RIP.)

But first, back to Chester, Pennsylvania!

Chester PA at Route Fifty (with Liz)

Back in November, I wrote about Chester. The bit I wrote about, was them counting pension contributions that hadn’t actually been made as assets for the pension plan. Evidently, this was legit under Pennsylvania state law.

But it was not conducive to pension solvency or town solvency.

Here is Liz’s first of three articles on the situation: A Small City’s Descent Into Bankruptcy

Chester is an old city with a long history of manufacturing due to its location along the Delaware River. In fact, a marker in the city along the river commemorates the site where William Penn first landed in 1682. Its former courthouse was built in 1724 and is the longest continuously-used public building in the country. In the late 1800s, textile mills gave way to factories and by the mid-20th century, more than 66,000 people lived in Chester. During World War II, the shipyard along the Delaware River was home to 28 ship bays and employed 36,000—greater than the entire population of the city today.

The city’s decline over the following decades mirrored that of many other post industrial cities. The loss of manufacturing jobs led to a massive population decline and a diminished tax base.
….
One of the poorest cities in Pennsylvania, Chester was declared a financially distressed municipality in 1995 under a state law known as Act 47 and given a recovery coordinator who reported to the state. Despite the many alarm bells raised over the ensuing years about the city’s deteriorating financial situation, little seems to have changed.
…..
In 2020, a court placed Chester under receivership, only the second time such proceedings had been instituted by the state. The receiver, Michael T. Doweary, is the former business administrator for the city of York, Pennsylvania and had some direct control over city finances but still needed local approval to restructure services and financial liabilities to avoid bankruptcy and harm to residents. But after two years of butting heads over the deficit—nearly as high as the city’s $55 million budget—and how to resolve $430 million in mostly pension and retiree healthcare liabilities, Doweary filed for Chapter 9 bankruptcy protection on behalf of Chester.

Note that I highlighted the 1995 — Chester’s decline has been a long time developing. Unlike corporate bankruptcies (as discovered by Meredith Whitney, to her cost), municipalities usually take a very long time to go kaput.

Which brings me back to Liz Farmer’s substack.

It’s a very long story, but not a long substack

Liz’s retrospective got my attention with this line:

Getting to insolvency is a group effort

Ain’t that the truth.

Five or six years of bad decisions does not bankrupt a city. It takes decades of pushing off financial responsibility for a city to get to the point where it has no other options.

This is the value of having somebody like Liz Farmer reporting along the way.

It takes decades of bad decisions, and, by the way, none of these are particularly a surprise. We can all see this coming.

The name of her substack is Long Story Short, and it’s what it says on the tin: the posts are not long, but they are telling you the important part of a very long story.

Here is an example: Debunking state and local tax rankings

Taxes 101: You get what you pay for

Seems obvious—if you pay for more stuff you get more stuff (or better stuff), and vice versa. Yet when it comes to taxation, this basic principle tends to be forgotten by a lot of elected officials. Hicks’ research draws a clear correlation between spending and services.

….
Hicks shows that the general public gets it too. We don’t care nearly as much about low taxes as we do about quality of life.

Farmer’s posts are paid, so I’m not going to be excerpting too much from those. But what’s great is she is pulling key points, making them, and moving on.

(and I happen to agree, re: taxes — I deliberately chose to live in one of the highest-tax locations in the U.S. It’s because I like a luxury lifestyle. When friends have complained they are not getting certain government services, I explain my family does, and why not move up and become my neighbor? Then they look at the tax price tag.)

Free Farmer!

So I gave the substack (paid posts) pride of place, but Liz Farmer also writes in other locations and has some other links.

The main way I consume her material is actually via podcasts — the Public Money Pod, produced by the Center for Municipal Finance, at the Harris School of Public Policy, at the University of Chicago. Her co-host is Justin Marlowe, and I’ve listened to all their episodes – 15 so far in 2022. I hope they do more!

Each episode usually has an interview with one (or two) people on a particular topic in public finance, and it’s generally somebody who is “working live” right now, some with budgetary power! Woo!

Other locations

Twitter: https://twitter.com/LizFarmerTweets

Website: https://www.farmersfieldonline.com/

Route Fifty pieces: Route Fifty search results

Please support those who write about public finance

While I do some analysis of public finance reports, I’m mainly using the work of people like Liz who do report by talking to those who do have that budgetary power and do that actual work.

I’m mainly aggregating and commenting.

And I can’t aggregate and comment if there’s nobody I can comment on.

Back in August 2019, the magazine where I had gotten a lot of my public finance stories, Governing, announced it was closing up shop (or really changing its nature – it’s still around, but at reduced publication to what it had been.)

Aug 2019: Governing Magazine: In Memoriam

I checked my own archives, and found 85 posts in which I linked to Governing.com. I have 3 pieces in draft (not including this one), and one I reallllly need to finish before Governing.com is completely gone. I can use archive.org, but it doesn’t necessarily archive every item out there.

Liz Farmer had worked there, and she was one of my main sources from Governing.

A few STUMP posts that reference Liz Farmer

This is not comprehensive. I actually linked to Liz Farmer pieces more often than listed below… I’m sorry to say, most of the time when I linked to Governing pieces, I did not name the author. I did a quick search on her name, so it’s mainly more recent posts that have come up.

May 2020: State Bankruptcy and Bailout Reactions: Would Pensions Really Have to be Cut in Bankruptcy?

Aug 2020: Meep Quicktake: Congressional Bailout Bill Status and Positioning

Sep 2017: Connecticut: A Review While Waiting for a Budget

Jan 2020: Taxing Tuesday: Are People Moving Due to Taxes?

Aug 2020: Taxing Tuesday: The Money Goes Away

But as I noted, I first was contacted by Liz back in February 2015 about a change in public pension accounting (GASB 67/68). I couldn’t help her directly, as it was into minutiae that really required a pension actuary (and, as I’ve noted many times, I’m not a pension actuary – I’m life/annuities), but I knew several pension actuaries and could make some introductions.

I’ve kept up with her over the years, and she’s provided me with details and angles that I can’t get at simply looking at balance sheets.

So check Liz Farmer out!