RSS
Twitter
Facebook

Florida Ranks 12th in Nation in Financial Health

In 2016, Florida ranked 12th in the nation and received a grade of ‘C’ for its financial health, according to a recent report by Truth in Accounting.  While Florida is better off than many other states, it still has almost $10 billion more in debt than it has in assets, corresponding to a tax burden of $1,600 per taxpayer.  Lawmakers should ensure sufficient funds are set aside each year to meet future retirement obligations. Further, all state liabilities should be included on the state’s financial statements to provide taxpayers with an accurate reflection of its financial health. 

Dhanraj Singh
September 2017

The Financial State of the States report, a publication of Truth in Accounting, annually tracks and analyzes state finances to provide citizens with an easy-to-understand assessment of each state’s financial health.  The report provides information on states’ total assets available for paying debts, total debts and whether or not states have sufficient funds to meet their debt obligations. States with more assets than debts are said to have a “taxpayer surplus” while states with more debts than assets are said to have a “taxpayer burden.”

Nine states have more money than required to pay their bills. Alaska ranks 1st with a surplus of $38,200 per taxpayer; after settling all of its debt, it has the most money available to pay future bills. Forty-one states do not have enough money to pay their bills. New Jersey ranks 50th with a tax burden of $67,200 per taxpayer; each taxpayer would have to pay this amount for the state to have enough money to pay its bills.

 

Florida ranks 12th in the nation and receives an overall grade of “C.” In 2016, the state finances slid further into the red with total assets available for paying debts of $61.4 billion, compared to total debts of $71.3 billion, leaving the state with excess debts of almost $10 billion. This corresponds to a debt burden of $1,600 per taxpayer – the amount each taxpayer would have to pay in order to make the state debt free. While Florida reports most of its pension debt, it continues to hide most of its retiree health care debt, which totals $9.1 billion. This skewed financial data provides Floridians with a false impression of the state’s financial health.

Despite new rules to increase financial transparency, state government officials across the country continue to obscure large amounts of debt on their balance sheet, notes the report. One way in which they do this is by using some of the money that should have gone into retirement funds to keep taxes low and pay for politically popular programs. This shifts the payment of employee benefits to future taxpayers, allowing officials to balance their states’ budgets while state debt is increasing, according to the report.

In the spirit of increasing transparency and accountability, state lawmakers should ensure that retirement transfers are made in the year in which they were earned and not used for other purposes. This would ensure sufficient funds are available to meet future retirement debt obligations as they become due. Also, lawmakers should ensure that all state liabilities are included on the state financial statements to provide taxpayers with an accurate reflection of the state’s financial health.

PDF version

 

MENU