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

spending bill ugly money billsMost 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.

There is some “sunshine,” but precious little. Only three states received A’s for their fiscal condition. Another seven received B’s, 13 received C’s, 18 received D’s, while the rest earned failing grades of F for their fiscal irresponsibility.

Four of the five “sunshine” states — Alaska, North Dakota, Wyoming, and Idaho — are enjoying surpluses thanks largely to their booming energy industries. But all five are behaving responsibly with their surpluses. TIA lauded Utah for its careful and prudent financial management:

Utah’s taxpayers and residents benefit from some of the most responsible financial management practices in the nation. Utah has the best record among the 50 states in keeping expenses below revenues.

In fact, Utah has done that every year since 2005 — even during the Great Recession. For FY 2018, Utah has a Taxpayer Surplus of $5,300.

Utah also produces some of the timeliest financial reports in the nation.

On the other hand leaders in Connecticut (48th) are frittering away their state’s healthy financial condition by deliberately underfunding that state’s promises:

Connecticut’s overall financial condition improved slightly from the previous fiscal year. The amount of Connecticut’s debt related to unfunded retiree health care benefits slightly decreased, but the state still needs $51,800 from each state taxpayer to pay off the debt accumulated to date.

While some focus on Connecticut’s strong economic indicators, such as personal income, the state is not setting enough money aside to pay for promised benefits, including unfunded pension and retiree health care promises.

Adding to the woes of “sinkhole” states is the exodus of high-income individuals. Lee Wallace, a resident of Illinois, is one of those who hasn’t left yet, but plans to shortly:

I live in Illinois. Lifelong Illinoisan. Yes, I know it sucks. My 5 year plan is to leave the state before it collapses financially and my home value plummets. Property taxes, sales taxes and income taxes are insane over here. DO NOT MOVE HERE….

I live outside of Chicago in the suburbs. Yes there are lots of jobs and opportunity here so that’s good — but beware: Illinois is a house of cards that is near its tipping point, financially speaking. The unfunded pension debt is unsustainable and among the worst in the country.

They can’t fix the pension problem because this is a completely blue state and run by Democrats and also very strong labor unions and lobbyists over here.

Reprinted with permission from - The New American - by Bob Adelmann

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BajaRon

Socialism, it has never worked, ever. Yet it is continually touted as the universal solution because it gets votes. Socialism is our modern day form of slavery as every citizen becomes an indentured servant to a government which promises you the world while sucking you dry.

JerryH

Socialism has never been about helping people improve their lives unless you are one of the elite at the top of the power pyramid.

George Moore

It would be interesting to see a rank order listing by taxpayer liability for all 50 states.

dino

I live in downstate illinois.Chicago and northeast illinois and madigan dictate what entity runs this state.If a republican gets elected madigan and company put a strangle hold on them.This state should be named the poster child for term limits.Also there needs to be a level playing field,social security and medicare for politicians,the same as people that work for a living and pay should be based on what they do,not what they think they do.And that is only a start in trying to fix this state.

Pat

I would opine that most of those states are (and have been) run by “lifetime politicians”, people who’ve never worked in private industry, people who’ve never had to be concerned with fiscal responsibility in order to succeed. Term limits please.

Jerkweed

Does it bother anyone else that we have unions in all levels of government? I think it should be illegal for this to happen, if I don’t like a union product I can shop else where, if I don’t like the state taxes I still have to pay . It feels like highway robbery!

Neil Schmidt

It’s all about money and votes. Debt? The Democrat/Socialists just yawn; after all it’s not THEIR money! They promise the moon to a large segment of voters, and those welfarian voters keep them in office year after year, while the TAXPAYERS are forced by law to support the entire sham that results in nothing less than a scheme for income redistribution. Anyone who disagrees or who even protests is labeled a “racist” or worse. Hillary Clinton smugly calls us the “deplorables.” I—for one—proudly wear that label.

We are headed to the abyss of Socialism (maybe we’re already there, to at least some degree), and people who stand behind such an insane form of government are absolute fools. I have to gag when I hear people remark that they are “social” liberals, but “financial” conservatives, or vice versa. Of course when asked, they can’t explain the difference, if there is any.

stephen russell

CA rates 43 in Sinkhole states listing, & ALL debtor states are Dem Run & what can we, More debt.
Thanks Dems,

Rick J.

And than pile on the national debt and what do you have? A giant financial mess aka BANKRUPT !!!

Morbious

There are ‘common sense’ solutions that will likely never be implemented. First, change how public employee unions negotiate new contracts. As it stands now, politicians who need their votes And Who Will be Long Out Of Office when the liabilities come due negotiate on the part of the taxpayers. As an aside, here in ohio, Kasich tried to correct the situation in 2010 and was roundly spanked by the unions. He has never recovered. Second, why the heck are people who dont pay taxes allowed to vote on their increase, such increases being born by others? Its insane. Yes, there are still plenty of braindead libs who will vote themselves higher taxes, but its at least possible that greater accountability would result if only those who will be pulling the cart are allowed to decide how heavy the load will be.

victor F. Bastianos

THE LIBERALS WILL ENSURE WE ALL END UP AS VENEZUELA!!!!!!!! BUY CANNED GOODS…..FILL UP A ROOM WITH THEM, if you keep voting democratic, you will need them soon!!!!!!!!!!!!!!!!!!!!!!!!!!!

Jack

I would like to see a copy of that list since Louisiana has a Governor election in progress. Our current governor is touting he has brought our state to a $500 Million dollar surplus. But he wouldn’t lie, he’s a Gimmedat.

David Mansfield

I lived in Illinois until 8/31/2016 and moved to neighboring Indiana. Illinois is toast, not a matter of if, but when.

phil

And the liberals and socialist want to add more entitlements. Maybe they should pay for these costs. Know we are preaching to the choir, how do you get the message out to them.

James Marshall

I am becoming more and more interested in joining a public discussion about Socialism and it’s presence in our life today. For starters, here are two definitions of Socialism: 1. the set of beliefs that states that all people are equal and should share equally in a country’s assets, or the political systems based on these beliefs 2. any economic or political system based on government ownership and control of important businesses and methods of production,

Tom

A freshman student demands that their college tuition should be paid for by the government. The student is asked if they want their room and board paid for also. The student happily says ‘yes’. The student goes to college for four years and loves his (her) time there studying the major they wanted. They graduate from college and gets a job in their major. The job is high paying. They start work and love their job. They pick up their first pay check after two weeks. However, their pay check is only 10% of what the expected. They go to the financial office and ask why their paycheck is so low. They are told that other people paid for their college and now he (she) will be paying for another student’s tuition, room and board. Of course, the amount is even higher since costs also have gone up. The student… Read more »

carol

For those wanting to know where their state is on the list…there’s a link in the article to that document! Click on it and you can find your state and read how your state is doing!

flitec

When I went to work at Boeing Charleston SC we were non union and didn’t want the union. in there propaganda drive they published cartoons of black workers on there hands and knees with with a white worker standing on there back working on the aircraft. the union said airplanes built in South Carolina were built by dumb country hicks that didn’t know anything about airplanes and they would eventually crash. and then they couldn’t understand why people would meet them at the door wanting them to join the union with a gun in there hand.they’re still trying to unionize boeing SC and I hope people don’t fall for it. unions are the downfall of America especially government unions which I’m still trying to figure out how that happened. so if you’re not union and you’re not a socialist and you don’t have the sign of the beast tattooed on… Read more »

sherry

how does Arizona rank (where I live) on this financial state of state reports?

Rocky U

Near the Jubilee, Government taking your money from the bank or investments.