Oklahoma has higher taxpayer burdens than in Pennsylvania, Alaska
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Published: 11-Feb-2011
CapitolBeatOK Staff Report
 
Today (Friday, February 11), the Institute for Truth in Accounting (IFTA) released Pennsylvania’s “Financial State of the State.” Earlier this week, the group released its similarly detailed assessment for the state of Alaska. In these analysis, Oklahoma compares unfavorably to both of the states.
 
After an intensive review of the Pennsylvania’s 2010 audited financial report, the Institute determined the State is in a precarious financial position because it does not have the funds available to pay more than $52 billion in  commitments as they come due.  Each taxpayer’s share of this financial burden equals $12,200.
 
Pennsylvania law requires a balanced budget. “If governors and legislatures had truly balanced the state’s budget, no taxpayer’s financial burden would exist,” said Sheila Weinberg, founder and CEO of the Institute for Truth in Accounting (IFTA). She continued, “A state budget is not balanced if past costs, including those for employees’ retirement benefits, are pushed into the future.”
 
While Pennsylvania reported total assets of $85.4 billion, the Institute’s review of the state’s 2010 financial report revealed that there are $33.4 billion of off-balance sheet retirement liabilities.  More than $45.1 billion of the State’s assets cannot be easily converted to cash to pay bills of $92.2 billion as they come due.
 
These assets consist of capital assets, including infrastructure, buildings and land, and assets the use of which is restricted by law or contract. The State does not have the funds needed to pay for $52 billion of state obligations, according to IFTA.
 
Many obligations relate to the Keystone State’s employees’ and teachers’ pension and retirement healthcare benefits. Years of over-promising retirement benefits, while shortchanging funding, have resulted in the state’s retirement systems being underfunded by $35.1 billion.
 
As of June 30, 2010, Pennsylvania’s government had set aside only 65 cents to pay for each dollar of benefits promised. As of that date only $63.1 billion was deposited into the retirement systems, even though the actuaries calculated that a minimum of $98.2 billion should have already been contributed.
 
The Pennsylvania “Financial State of the State”, available at www.truthinaccounting.org and Pennsylvania.StateBudgetWatch.org provides this accounting by outlining the financial situation of the Commonwealth, including unfunded liabilities to the State’s retirement systems.
 
On February 7 (Monday), IFTA released the “Financial State of the State”  document for Alaska. Review of the state’s 2010 audited financial report led the Institute to determine Alaska is in a precarious financial position because it does not have the funds available to pay $555 million of the State’s commitments as they come due.  Each taxpayer’s share of this financial burden equals $1,900.
 
While Alaska reported total assets of $73.9 billion, the Institute’s review of the state’s 2010 financial report revealed that there are more than $17.9 billion of off-balance sheet retirement liabilities. More than $44.5 billion of the State’s assets cannot be easily converted to cash to pay State bills of only $29.9 billion as they come due. These assets consist of capital assets, including infrastructure, buildings and land, and assets the use of which is restricted by law or contract. As is the case in nearly all the states studied so far, the Institute concludes: “The State does not have the funds needed to pay for $555 million of state obligations.” 
 
As is the case many of the states examined thus far, including Oklahoma, many of Alaska’s obligations relate to state employees’ and teachers’ pension and retirement healthcare benefits.
 
In Weinberg’s analysis, “Years of over-promising retirement benefits, while shortchanging funding, have resulted in the state’s retirement systems being underfunded by $17.9 billion. As of June 30, 2010, the state had set aside only 46 cents to pay for each dollar of benefits promised. As of that date only $15 billion was deposited into the retirement systems, even though the actuaries calculated that a minimum of $32.9 billion should have already been contributed.”
 
The Alaska “Financial State of the State”, available at the Institute’s website and at Alaska.StateBudgetWatch.org provides this accounting by outlining the financial situation of the State, including unfunded liabilities to the State’s retirement systems.
 
The estimated per-taxpayer burden in Pennsylvania ($12,200) and Alaska ($1,900) is not as hefty as in Oklahoma, where it came in at $14,600 in the detailed analysis based on Fiscal year 2009 data. That study was released by the Institute last year.
 
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.”
 
Note: Editor Patrick B. McGuigan contributed to this report. 

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