From the Institute for Truth in Accounting…
Chicago (November 29, 2010) Today, the Institute for Truth in Accounting released Washington’s “Financial State of the State.” After an intensive review of the State’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 $31.7 billion of the State’s commitments as they come due. Each taxpayer’s share of this financial burden equals $13,800.
Washington state 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 Washington reported total assets of $73 billion, the Institute’s review of the state’s 2010 financial report revealed that there are more than $6.3 billion of off-balance sheet retirement liabilities. More than $42 billion of the State’s assets cannot be easily converted to cash to pay State bills of $62.7 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 $31.7 billion of state obligations.
Many of the obligations relate to state employees’ 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 $7.3 billion. As of June 30, 2010, the state had set aside only 74 cents to pay for each dollar of benefits promised. As of that date only $20.3 billion was deposited into the retirement systems, even though the actuaries calculated that a minimum of $27.6 billion should have already been contributed.
The Washington “Financial State of the State”, available at www.truthinaccounting.org and Washington.StateBudgetWatch.org provides this accounting by outlining the financial situation of the State, including unfunded liabilities to the State’s retirement 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 website at www.TruthInAccounting.org.