June 13, 2012 07:10 AM Eastern Daylight Time
CHICAGO--(BUSINESS WIRE)--The Institute for Truth in Accounting (IFTA) today released its second annual study of all 50 states’ assets and liabilities, including pension and retirement health care obligations. All the states together have more than $900 billion in off-balance sheet liabilities, and the taxpayer burdens in most states continue to grow due to poor budgeting rules and outdated accounting principles.
“States pay only what is due during the current budget year which does not take in account true long-term obligations on their balance sheets. Hundreds of billions of dollars of retirement liabilities are not reported, which pushes these costs onto future taxpayers.”
The report reviews each state's financial condition and identifies the top five "sinkhole" states, or the states in the worst financial condition, as well as the top five "sunshine" states, so named since they have adequate assets available to pay their obligations.
The five “sinkhole states” and the amount each taxpayer would have to send to its state treasury are: Connecticut ($49,000), New Jersey ($35,800), Hawaii ($32,700), Illinois ($31,600), and Kentucky ($23,500). The top five "sunshine states” and per-taxpayer surpluses are: Alaska ($21,200), Wyoming ($20,200), North Dakota ($9,500), Utah ($2,600), and Nebraska ($2,400). The study showed that one state, Hawaii, saw its unfunded health care obligations increase by $3 billion in just one year. A download of the full report is available at http://truthinaccounting.org.
Four of the five “sinkhole states” now have larger per-taxpayer burdens compared to last year’s report. Similarly, four of the five “sunshine states” now have larger per-taxpayer surpluses. The “sunshine states” are becoming financially stronger while the “sinkhole states” are becoming more insolvent.
“Antiquated government budgeting rules and accounting standards are to blame,” said Sheila Weinberg, founder and CEO of the Institute. “States pay only what is due during the current budget year which does not take in account true long-term obligations on their balance sheets. Hundreds of billions of dollars of retirement liabilities are not reported, which pushes these costs onto future taxpayers.”
About the Institute for Truth in Accounting
IFTA is dedicated to promoting honest, accurate, and transparent accounting at all levels of government and business. As a non-partisan, non-profit organization, IFTA works to expose accounting deficiencies while promoting better, more accessible delivery of accurate government financial data—and, in turn, providing a foundation for more informed public policy. IFTA provides its expertise to develop more effective accounting standards and deliver accurate government financial information to policymakers, opinion leaders, and citizens, so they can all work for a more secure financial future.