While Congress debated legislation that includes a federal balanced budget amendment, many pointed out that 49 out of the 50 states have that same legal requirement.
However, a new comprehensive study by non-partisan Institute for Truth in Accounting concludes that most state balanced budget laws have not worked, because past governors and legislators have not used truthful accounting to calculate their budgets. This lack of transparency has concealed a total of $1 trillion of outstanding bills, according to the group, which is based in Chicago, Illinois.
“State officials say their budgets are balanced but do not include employee pension and healthcare obligations in their calculations,” stated Sheila Weinberg, Founder and CEO of the Institute. “Unlike the federal government, states can’t ‘print money’ to cover costs and shore up their financial conditions.”
The Institute’s “Financial State of the States” Report reviewed each state’s Comprehensive Annual Financial Report (CAFR) to offset assets against liabilities. For the first time, a detailed analysis of pension and healthcare liabilities was completed which uncovered the states’ actual obligations. From these calculations, the Institute was able to determine the true Taxpayer’s Burden for all fifty states. Click here to download the full report.
According to the Institute’s analysis, Oklahoma was listed among the 25 worst states, but fell into the mid-range, that is among the “best” of the lower one-half among the states, with a per-taxpayer burden of about $10,000.
Based upon extensive research, the Institute for Truth in Accounting has found most states are sinking in debt. Despite the existence of a balanced budget requirement in all but one state, governors and legislatures have dug these financial holes, Weinberg and her colleagues concluded.
The Institute has identified Connecticut, New Jersey, Illinois, Hawaii and Kentucky as the top five “Sinkhole” states, each with a per taxpayer burden more than $23,000. Conversely Wyoming, North Dakota, Nebraska, Utah and South Dakota are considered “Sunshine” states, because a per taxpayer’s surplus or minimal per taxpayer’s burden exists in these states.
About the Institute for Truth in Accounting: The Institute for Truth in Accounting (IFTA) describes itself as “dedicated to promoting honest, accurate, and transparent accounting at all levels of government and business. As a non-partisan, non-profit organization, the 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.”
The 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.”