Diamond News

Mayra Rodriguez Valladares

States with a Taxpayer Burden are shown in red; states with a Taxpayer Surplus are shown in black.

Truth in Accounting, Financial State of the States

Forty U.S. states do not have enough money to pay all their bills primarily due to significant unfunded pensions or Other-Post-Employment Benefits (OPEB). Truth in Accounting[1] (TIA), a nonpartisan, not-for-profit has been monitoring the financial health of states for a decade in order to educate taxpayers about the financial health of their states today released its tenth annual Financial State of the States[2]. Since I published “Forty U.S. States Cannot Afford To Pay All Their Bills[3]” last year, total U.S. states debt decreased slightly, less than 1%, from $1.5 trillion at the end of the fiscal year 2017, to $1.49 trillion in fiscal year 2018. Truth in Accounting’s 2018 data shows that unfunded retirement liabilities are the main contributing factor to the almost $1.5 trillion in state-level debt. Unfortunately, “one of the ways states make their budgets look balanced is by shortchanging public pension and OPEB [other post-employment benefit] funds. This practice has resulted in a $824 billion shortfall in pension funds and a $664.6 billion shortfall in OPEB funds.”

Despite the fact that the total U.S. economy is still growing, states have not been able to lower their unfunded liabilities. This is not good news given that the rate of growth in the U.S. is starting to slow down, and many U.S. states’ fiscal health[4] continues to be very vulnerable to Trump’s trade wars.  According to TIA Founder and CEO Sheila Weinberg[5],  “Many of these state governments have no hope of achieving a budget recovery barring significant program...

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