The group Truth in Accounting is releasing a new report today that raises questions about N.C. government debt.
From the group’s news release:
Chicago — Today, Truth in Accounting (TIA), a Chicago-based think tank that analyzes government financial reporting, released an in-depth report titled, Financial State of North Carolina, on the current financial condition of North Carolina. The report reveals that North Carolina’s retirement debt is not reported on its balance sheet. The state’s retirement debt totals to $27 billion and makes up 56 percent of the state’s total debt.
North Carolina’s retirement debt can be left of the state’s balance sheet because the state uses antiquated accounting rules. When the unreported retirement debt is included, the state’s total debt is about $48 billion. TIA’s report also reveals that North Carolina only has $24 billion available to pay its debt, leaving debt behind for future taxpayers.
When the debt is divided amongst North Carolina taxpayers, each taxpayer’s share is $8,400.
“Unless the pensions and health care benefits for retirees are renegotiated soon, the state’s deficit will fall on retirees’ grandchildren,” says Sheila Weinberg, Founder and CEO of Truth in Accounting. “No parent or grandparent wants to burden their loved ones. It’s up to the state’s legislature to stop this from happening and use up-to-date accounting methods to accurately report all of the state’s liabilities.”
Concerns about states’ long-term liabilities should surprise no one who reads this forum regularly. John Hood highlighted the issue for state governments across the country in a 2011 article for National Affairs.
