From Truth In Accounting…
Truth In Accounting Issues New Jersey’s “Financial State of the State”
Today, the Institute for Truth in Accounting released New Jersey’s “Financial State of the State.” The numbers are not good and they are getting worse every day. The state’s bills as of June 30, 2009 were $143 billion and the state had already used $33 billion of assets that were supposed to be set aside to met established legal and contractual obligations. To pay bills and obligations past legislators should have already covered current and future, taxpayers will have to come up with $176 billion—$66,200 per family.
“Before legislators vote on pension reform and the state budget, they should know the state’s true financial position,” said Sheila Weinberg, founder and CEO of the Institute. “For decades New Jersey’s governors and legislators have claimed balanced budgets, but now the state is in a financial hole of more than $107 billion. This is a result of using political math, instead of honest accounting when calculating balanced budgets.”
The June 20, 2009 financial report issued by the State Office of Finance reports net assets of negative $21 billion. The Institute reviewed of the pension systems’ actuarial reports revealed $24 billion of off-balance sheet pension liabilities and $62 billion of off-balance sheet employee health care liabilities.
Years of overpromising pension benefits, while shortchanging the funding of the pension systems have resulted in the state’s retirement systems being $100 billion underfunded. During fiscal year ending June 30, 2009, the state deposited only one fifth of the contributions the systems’ actuaries calculated would be need to adequately fund the plans. In his budget address Gov. Chris Christie noted that $3 billion of the required contribution would not be made in the coming year.
“It is impossible to truly balance a budget if you don’t pay your current bills and adequately fund your retirement systems every year,” said Roger Nelson, Chairman of IFTA’s Board of Directors and former vice chair of Ernst and Young. He continued, “The citizens of New Jersey need to demand their elected officials use honest accounting to calculate a balanced budget.”
To promote greater financial transparency and to provide the public and elected officials with a comprehensive picture of their governments’ total activity, including the long-term effects of budget decisions, legislators in Illinois and Florida have introduced the Truth in Accounting Act.
The New Jersey Financial State of the State, available at www.TruthInAccounting.org and NewJersey.StateBudgetWatch.org, provides this accounting by outlining the financial situation of the state, including unfunded liabilities to the state’s pension systems.
About the Institute for Truth in Accounting
The Institute for Truth in Accounting (IFTA) is 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. To learn more, please visit our websites at www.TruthInAccounting.org and StateBudgetWatch.org.