(National Sentinel) Democratic ‘Leadership’: States and cities around the country are facing $1.5 trillion in debt, though Democrat-run blue states and cities are by far the worst off, according to a new report.
Truth in Accounting, a Chicago-based group that studies the financial condition of states and produces an annual “Financial State of the States” report, looks at long-term obligations such as pension benefits and health coverage for retirees.
Then, the organization compares obligations with projected state revenues.
This year the organization found that 40 states did not have enough income to meet present and future financial obligations, Lifezette reported, noting further:
The overall picture is only slightly better than it was a year before, which is something of a surprise to the founder of Truth in Accounting, Sheila Weinberg.
Weinberg said stock market gains have whittled away at pension shortfalls, but she added that an increase in health care costs offset those gains.
The states combined had $837.5 billion in unfunded pension liabilities and another $663.1 billion in unaccounted-for retiree health costs. Weinberg said state officials often obscure this bleak picture in hard-to-read financial statements that exclude such obligations.
“Elected officials have been telling citizens they’ve been balancing their budgets, but they have not been counting theses [employee] retirement costs,” Weinberg added.
Blue Democratic states are the worst off, the report noted:
It is a problem facing most states, but those dominated by Democrats are faring worse. The think tank lists five “sinkhole” states — those with the worst long-term finances. New Jersey, which has had a Democratic-controlled legislature since 2002, ranks last, with a $61,400-per-taxpayer shortfall.
Long-time Democratic bastions Connecticut ($53,400), Illinois ($50,800) and Massachusetts ($33,500) also rank among the bottom five.
Kentucky, with a per-taxpayer debt of $39,200, is the only Republican-leaning state in the bottom five, but it has been fairly split at the local level in recent years. Although the GOP won control of both houses and the governor’s office in the 2016 election, Democrats had controlled the House since 1994 and the governor’s office for all but four of those 22 years.
Meanwhile, states with better long-term finances lean Republican:
Alaska is best off, with a long-term surplus of $56,500 per taxpayer. It currently has an independent governor but had Republicans from 2003 through 2014, and the GOP controlled both houses of the legislature for all but seven years since 1995.
North Dakota ($24,900), Wyoming ($19,600) Utah ($4,000), South Dakota ($3,100), Idaho ($2,700) and Tennessee ($2,500) all have Republican governors and have had Republican majorities in their legislatures for several years. Nebraska ($1,000) has a nonpartisan legislature but has had Republican governors since 1999.
Among the 10 healthiest states, only Oregon ($1,000) leans Democrat. In Iowa ($500), Republicans have controlled the governor’s office and at least one branch of the legislature since 2011.
In December, The Daily Signal reported that collectively states have a $6 trillion pension obligation, according to data from the American Legislative Exchange Council.
“That’s a whopping $18,676 for every man, woman, and child, or nearly $50,000 for every household in America,” the site reported.
The worst offenders? Illinois, Ohio, Connecticut, and Alaska.
Pension debt bombs are a bane on taxpayers. Worse, many pension funds are protected by law, meaning they cannot be negotiated away or reduced. Outside of massive tax increases, federal bailouts are the only way these obligations get paid.
And good luck with that.