By Erin Amsberry
A recent study conducted by Truth in Accounting named Missouri “a sinkhole state” as it came in ranked as the 31st worst state in the nation for financial stability. Even though Missouri has measures in place that require legislators to balance the budget, their misleading ways of accounting allow Missouri’s financial situation to look much better than it actually is.
Missouri continues racking up a large debt, yet few seem concerned enough to reduce spending and start using accurate accounting. Truth in Accounting reports Missouri’s spending to be at $15.4 billion, meanwhile the state’s revenue is only $7.4 billion. That is a significant $8 billion deficit.
This deficit is growing especially due to the state’s refusal to give an accurate account of unfunded liabilities. For example, this study shows the state owes $9 billion in retirement pensions but less than 10% of that, only $848.2 million, has been accounted for in the budget. This is because employee retirement benefits are “not immediately payable in cash,” therefore, their appropriate costs have been completely ignored when balancing the budget.
It is this kind of deceitful round-about accounting that allows debt to pile up and politicians to get away with stating that they are “balancing the budget” when in fact they are continuing out of control spending. This accounting in the past has created an individual taxpayer burden of $4,400 each.
Not only is this burden unfair to taxpayers, but it is also harsh on government employees as unfunded retirement benefits represent 58% of state bills. According to Truth in Accounting, State employees have been promised $5.8 billion of pension benefits and $3.2 billion in health care benefits, yet none of this has been funded or accounted for in the state budget.
The 2014 study reports that: “unless pension and retirees’ health care benefits are renegotiated, future taxpayers will be burdened with paying for these benefits without receiving any corresponding government services.”
When it comes down to it, Missourians deserve to transparently see where state funds are being spent. Additionally, they should demand that their lawmakers actually balance the budget not just seemingly do so. Economic prosperity can only occur when both citizens and legislators see the importance of a balanced budget and restrained government spending, then act to maintain those practices.
This study serves as a reminder to Missouri citizens that the fight for economic prosperity and responsible spending must continue.