RALEIGH — North Carolina state government faces a “precarious financial position” because it doesn’t have $43.4 billion available to pay state obligations as they come due. That’s the assessment the Chicago-based Institute for Truth in Accounting reaches in a new report (PDF link) released today.
“Each North Carolina taxpayer* is on the hook for $16,300 to pay health and pension benefits to state employees,” said Joseph Coletti, John Locke Foundation Director of Health and Fiscal Policy Studies. “This report from the Institute for Truth in Accounting should be a wake-up call to elected officials and taxpayers. Past legislatures and governors made unsustainable promises to state employees. Defined-contribution health and pension plans would be better for state employees and taxpayers alike, so they should be part of the budget solution this year.”
North Carolina reported total assets of $80.4 billion, but also had almost $35.4 billion of off-balance sheet retirement liabilities, according to the new report. Among the state’s assets, almost $57.2 billion cannot be converted easily to cash to pay state bills of $66.6 billion as they come due. Most of the obligations relate to pension and retirement health care benefits for state workers and teachers.
*NOTE: In an earlier version of this release, the $16,300 obligation was applied to every North Carolina resident. The reference to “taxpayer,” rather than “resident,” represents a correction.