This Just In: State In Shambles

Anthony Pignataro:

Today the Chicago-based Institute for Truth in Accounting released the latest in its series of 50 state audits, this one dealing with little ol’ California (click here for a PDF of the new study). On reports as these, the question isn’t whether the auditors will find that the state is in shambles, but to what extent:

“While California reported total assets of $266 billion, the Institute’s detailed review of the State’s 2009 financial report revealed that there are more than $81 billion of off-balance sheet retirement liabilities,” says the press release on the new report. “The Institute also determined that more than $157.1 billion of the State’s assets cannot be easily converted to cash to pay State bills of $303.9 billion as they come due. These assets consist of capital assets, including infrastructure, buildings and land, and assets that are restricted by law or contract. This means the State does not have the funds needed to pay for more than $195 billion of State obligations.”

The fact that the Institute had to use California’s 2009 financials to do this analysis is because the state Controller’s Office is habitually nine months late in releasing said financials. The fiscal year ends in June, but the state’s Comprehensive Annual Financial Report never gets released before the following March, guaranteeing that Legislators are forever using moldy data when planning next year’s budget.

Of course, legislators around here treat pension liabilities as completely separate from the budget process anyway, which is in itself another form of fraud on taxpayers.

“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) in the release. “A State budget is not balanced if past costs, including those for employees’ retirement benefits, are pushed into the future.”

And we wonder why things are so bad here…

DEC. 20, 2010