Georgia: A Sinkhole State? - By Joel Aaron Foster
The non partisan Truth In Accounting group is out with their fifth report calling out Georgia as a sinkhole State when it comes to its overall financial conditions and taxpayer burdens. The taxpayer burden represents the amount each taxpayer would have to send to their state’s treasury to fill its current financial hole.
The report is the proverbial data-driven demonstration of what it means to “kick the can down the road” where state’s use budget gimmicks including borrowing money to fill budget holes or delaying writing checks for current bills. State governments often move the government payroll back one day into the next fiscal cycle to make the balance sheets look better.
The report finds that Georgia ranks 28th worst nationwide, owning $15.7 billion in available assets while owing $29.4 billion dollars. The $13.8 billion gap represents compensation and other costs that have been pushed into the future. The individual taxpayer burden for our debt is $5,000.
The report discloses:
Truth in Accounting’s detailed analysis discovered a total of $14.3 billion of retirement benefits have been promised but not funded. Because of the confusing way the State does its accounting, only $1.6 billion of these liabilities are reported on Georgia’s balance sheet.
The report continues:
The state of Georgia has $56.7 billion in total assets, but most of these assets are not available to pay State bills because they are considered capital assets. Unfunded employees’ retirement benefits represent 49% of State bills. These unfunded liabilities have accumulated because State employees have been promised $7 billion of pension benefits and $7.4 billion of retirees’ health care benefits, but the State has not adequately funded them. A detailed study of Georgia’s actuaries’ schedules found retirement benefits totaling $14.3 billion have been promised, but not funded. A review of the State’s balance sheet determined only $1.6 billion of
these liabilities are reported. This means the State does not report $12.8 billion of retirement liabilities on its balance sheet.
Read the full report HERE including seeing how Georgia ranks relative to other states fiscal balance sheets.
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