Inside Track
40 of 50 States Don’t Have Enough Money to Pay Their Bills
Now that states are required to follow new rules of full financial disclosure, the truth is coming out: Most of the states in the union don’t have enough money to pay all of their bills. In Truth in Accounting’s (TIA) Financial State of the States report, released in September, Sheila Weinberg noted:
At the end of the fiscal year (FY) 2018, 40 states did not have enough money to pay all of their bills. This means that to balance the budget — as is supposedly required by law in 49 states — elected officials have not included the true costs of the government in their budget calculations and have pushed [unreported] costs onto future taxpayers.
While most states report that they are making efforts to fully fund their pension plans, in the past they weren’t required to account for liabilities for pensioners’ healthcare costs. Now they are.
For example, the state of New York touts its fiscal responsibility by reporting that it has funded 93 percent of its pension liabilities. But under the new full-disclosure rules, the state has been forced to reveal that it has only funded one penny out of every dollar of its enormous retiree healthcare obligations.
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