Arizona's 'state of the state' grim – but Oklahoma's is worse

Capitol Beat OK

CapitolBeatOK Staff Report

Published 03-Feb-2011

Chicago, Illinois – This week, the Institute for Truth in Accounting released Arizona's “Financial State of the State,” the latest in the group's ongoing series examining the extent of debt and taxpayer burdens in all 50 states.

After an extensive review of Arizona's 2009 audited financial report, the Institute determined the State is in a precarious financial position because it does not have the funds available to pay $10.1 billion of the State’s commitments as they come due. Each taxpayer’s share of this financial burden equals $5,700.

Arizona 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 Arizona reported total assets of $35.6 billion, the Institute’s review of the state’s 2009 financial report revealed that there are more than $2.1 billion of off-balance sheet retirement liabilities. More than $28.3 billion of the State’s assets cannot be easily converted to cash to pay State bills of $17.2 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 $10.1 billion of state obligations.

Many of the obligations relate to state employees’ pension and retirement health care benefits. Years of over-promising retirement benefits, while shortchanging funding, have resulted in the state’s retirement systems being underfunded by $2.1 billion. As of June 30, 2009, the state had set aside only 79 cents to pay for each dollar of benefits promised. As of that date only $7.8 billion was deposited into the retirement systems, even though the actuaries calculated that a minimum of $9.9 billion should have already been contributed.

The Arizona 2010 audited financial report has not been issued more than 270 days after the State’s fiscal year end. The Arizona “Financial State of the State”, available at www.truthinaccounting.org and Arizona.StateBudgetWatch.org provides this accounting by outlining the financial situation of the State, including unfunded liabilities to the State’s retirement systems.

Of the 29 states the institute has examined so far, Arizona is the eighth best, or 22nd worst, of the states in terms of the financial burden taxpayers would carry if the existing debts had to be paid now. By way of comparison, Oklahoma is the 18th best, or 12th worst by that measure.

Oklahoma, Arizona, and virtually every other state investigated by IFTA have at least one issue in common, and that is the unfunded burdens embedded in pension and retirement benefits for employees of state government. An overview of Oklahoma's situation was offered in the February 2 story for CapitolBeatOK, “For Oklahoma, other states: financial gaps, per-taxpayer burdens are Good, Bad, Ugly.”

Concerning Oklahoma, Weinberg commented when completing her investigation of Sooner State financial burdens last year: “Years of over-promising pension benefits, while shortchanging the funding of the pension systems have resulted in the state’s pension funds being underfunded $14.8 billion. For the state’s fiscal year that ended June 30, 2009 only $1 billion was deposited, even though the pension systems’ actuaries calculated that a minimum of $1.3 billion should have been contributed.”

In comparison to Arizona's per-taxpayer burden of $5,700, the levy in Oklahoma would be $14,800 if the bill came due.

About the Institute for Truth in Accounting (IFTA): The group describes itself as “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.”

Note: Editor Patrick B. McGuigan contributed to this report.

[Luther]

I believe some of this, but to get a more accurate analysis, one must use the Comprehensive Annual Financial Report (CAFR).  http://cafr1.com/   One may learn a lot by investigating sources and how disbursement is arranged.

This report shows all moneys, and to whom they are dedicated or committed. We may hope to see the 2010 report, but more than liklely, we will be limited to the latest being 2009.

 

Finances are a troubling discipline, and one must look long and deep to learn what a State or Country has available.

 

Give it a try!  

[1m8wugvaeqdba]

 If the IFTA is so concerned about the budget of States & how much each family is burdened with, through their Transparent Auditing, why aren't they/ we  requiring the same of the "federal Reserve" as they seem to be totally out of control  and answerable to "NO ONE" Which problem is more damaging? D Raymond

[Luke P. Patrino]

I wonder if a large part of this problem could be solved with the removal of all the illegals who are draining Az. social services for hundreds of millions each and every year. Couple that with the unrealistic pension plans for Union Government workers and we will have States like Az., Ca, NY and Ok. all declaring bankruptcy. These financial shortfalls are multi-faceted and are caused by more then one problem. Illegals cost this Country over 400 billion a year. That's 4 trillion over the last 10 years. We sure could use that wasted money now. All that talk about them doing jobs Americans won't is nothing but bullsh*t. Every time it snows, as soon as it stops I have 4 or 5 20 something year old's knocking on my door to shovel my walk and driveway. This is another fine mess you've gotten us into Ollie-Bush-Clinton-Bush-Obama. PS RINO John McCain just joined with John Kerry to pass legislation concerning Egypt in the Senate. What a lying piece of human garbage. McCain will jump in bed with every liberal Democrat in Washington. Kerry is Teddie's Mass. replacement whore for the new and conservative John McCain. Ain't this a great Country. Tell us what we want to hear and get re-elected, ain't that right uh hu, uh hu.

[Sandra Lee Smith]

Those freaking law suits aren't helping either.  But the hidden drains of  the illegals on our health care, and schools as well as other services is staggering.  Very often we're stuck with emergency care because they suffered heat or cold injuries coming through the desert ill-equipped, to start off with, and that can be for whole flocks of them at once.  But they drain all our states' resources, not just AZ or TX, and that's one of the biggest reasons to send them back where they came from.  It's been figured that would actually  pay for itself within about 3 years; sending they ALL back wherever they came from.  That'd help all the faltering states' economies immensely.

[Billy Bowlegs]

Why did ITFA not include the imposing cost of Doing Business with the Obama Government?

 

Why does the ITFA not audit the Fed Reserve?

 

My wife audits our bank account and kicks my butt if we are even near overspending each month.

 

That means, with Obama in Office, I get at least twelve ass kickings a year as long as he is in Office.

 

[Samita Sigala]

This is terrible. Thanks for posting that Twana. I just moved back to Oklahoma 2 years ago, the place of my birth and youth. I have been researching , trying to find out how financially stable we are. Also how often they re-assess property in Potawattamie County. I live a few miles out of town. Anyway, thanks so much.