retirement liabilities

Nebraska Under-Reports Retirement Liabilities by Over $700 Million, Says Watchdog Group

Every year, watchdog group Truth in Accounting scrutinizes the finances of every states and produces a report on what they find.

By and large, Nebraska passed TiA’s fiscal test with flying colors—except when it came to retirement liabilities. The state reported its liabilities to be a little over $1 million. But Truth in Accounting says the liabilities are closer to $770 million.
From Nebraska Watchdog:

Truth in Accounting, an economic think tank based in Chicago, named Nebraska one of just a handful of “sunshine states” with more than enough money to pay its bills. The state has $4.3 billion in liquid assets and owes about $3 billion, for a surplus of $1.3 billion — or $2,200 per taxpayer.

However, Truth in Accounting says Nebraska’s retirement liabilities are “massively underreported” at $1.1 million. Its detailed analysis of the state’s assets and liabilities, including unreported pension and retirement health liabilities, found $772.5 million in retirement benefits promised but not funded.

“Because of the confusing way the state does its accounting, only $1.1 million of these liabilities are reported on Nebraska’s balance sheet,” TIA wrote.

The report says unfunded employee retirement benefits represent 26 percent of state bills, as state employees have been promised $772.5 million in pension benefits. The good news is Nebraska has the money to pay for the liabilities.

Read the detailed report on Nebraska’s fiscal situation here.

Photo by Tom Benson via Flickr CC

Hawaii Labeled “Sinkhole” State by Watchdog Group

A few names consistently pop up in any discussion of states with the most pension debt—Illinois, New Jersey and a handful of other states are frequently cited as shouldering the heaviest pension burdens.

Hawaii isn’t always on that list. But according to one watchdog group, Truth in Accounting, the state’s pension burden is among the worst in the country. The Hawaii Reporter recaps:

Only Massachusetts, New Jersey, Illinois and Connecticut are in worse fiscal condition that Hawaii.

Donna Rook, president of StateDataLab.org, a division of Truth in Accounting, said Hawaii has been one of the five worst states since this annual study was started in 2009.

“The average Hawaii taxpayer’s share of the state’s debt is $27,000 after available assets are tapped. Since we set aside both capital assets and debt related to capital, the remaining debt is primarily unfunded pensions and retirement health,” Rook said.

The $27,000 per taxpayer is about 57 percent of the average resident’s annual income, Rook said.

Sheila Weinberg, founder and CEO of Truth in Accounting, said Hawaii financial statements show $4 billion in retirement liabilities, but the state actually has nearly $15 billion of unfunded retirement promises.

Hawaii has only $5 billion to pay the state’s bills, which total $18 billion, Weinberg said.

The same Truth in Accounting report also shared some better news: Hawaii has vastly improved the timeliness of its year-end financial reports.

For more data on Hawaii, visit Truth in Accounting’s data lab here.