40 of the 50 States Don’t Have Enough Money to Pay All Their Bills

Monday, September 30, 2019
By Paul Martin

by Bob Adelmann
Sunday, 29 September 2019

Most of the “sinkhole” states with the most red ink are blue. But should we be surprised?

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 its latest report, Sheila Weinberg, head of Truth in Accounting (TIA), which prepares and publishes its Financial State of the States report every September, said:

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.

Added together, those 40 states — the worst of which TIA refers to as “sinkhole” states — owe more than $1.5 trillion in total debt. When each state’s unfunded liabilities is divided by the number of each state’s taxpayers, the truth is staggering. For example, each taxpayer in New Jersey (50th on the list) owes $65,100 in order for the state to meet its promised obligations. Illinois is right behind, with each taxpayer liability calculated to be $52,600.

The Rest…HERE

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