Sunday, January 29, 2023
Hawai'i Free Press

Current Articles | Archives

Tuesday, September 2, 2014
Hawaii deemed ‘sinkhole’ state by fiscal watchdog for pension debt
By Malia Zimmerman @ 12:27 PM :: 4878 Views :: Hawaii Statistics, Taxes

Hawaii deemed ‘sinkhole’ state by fiscal watchdog for pension debt

Photo by Truth in Accounting Hawaii makes the list of top five sink hole states

by Malia Zimmerman, Watchdog.org,  September 2, 2014

HONOLULU — A report by a fiscal watchdog deems Hawaii one of the worst “sinkhole” states for its growing debt burden to taxpayers.

Chicago-based Truth in Accounting reviewed the finances of every state, focusing on unfunded liabilities such as pension and health care obligations to current and retired public-sector workers, for its annual “State of the States” report.

Only Massachusetts, New Jersey, Illinois and Connecticut are in worse fiscal condition that Hawaii.

Donna Rook, president of StateDataLab.org, a division of Truth in Accounting, said Hawaii has been one of the five worst states since this annual study was started in 2009.

“The average Hawaii taxpayer’s share of the state’s debt is $27,000 after available assets are tapped. Since we set aside both capital assets and debt related to capital, the remaining debt is primarily unfunded pensions and retirement health,” Rook said.

The $27,000 per taxpayer is about 57 percent of the average resident’s annual income, Rook said.

Sheila Weinberg, founder and CEO of Truth in Accounting, said Hawaii financial statements show $4 billion in retirement liabilities, but the state actually has nearly $15 billion of unfunded retirement promises.

Hawaii has only $5 billion to pay the state’s bills, which total $18 billion, Weinberg said.

Despite these financial realities, Gov. Neil Abercrombie’s administration has touted its fiscal prudence since being elected governor in 2010, and continued to do so through his primary re-election campaign.

Both Abercrombie and his primary challenger, Senate Ways and Means Chair David Ige, exchanged barbs leading up to the election over who was responsible for Hawaii’s fiscal “turnaround.”

Ige beat Aberrombie by 36 percentage points in the primary, constituting the largest primary loss by a governor in U.S. history and represented the first time a sitting Democratic governor in Hawaii was defeated in a bid for re-election.

Abercrombie’s administration claimed credit for the state depositing $100 million to the Hawaii Employer-Union Health Benefits Trust Fund in late June to “prefund” the cost of the state’s unfunded liabilities, including health insurance premiums and life insurance for state retirees.

Abercrombie said, in the past, the state opted to pay only the required minimum annual premiums, but is now working to pay down the $11 billion debt ahead of schedule.

Photo by Mel Ah Ching Gov. Neil Abercrombie touted his fiscal prudence during his final 2014 State of the State Address -- Photo by Mel Ah Ching

Under Abercrombie, Hawaii also enacted Act 268 in 2013, mandating state and county governments pay at least 20 percent of the annual amount needed to fund promised benefits to current and retired workers by fiscal 2015. That percentage bumps up 20 percent annually until 2019, when the funding mandate reaches 100 percent, and continues for at least 30 more years.

At least Hawaii made progress in the speed of its fiscal reporting: the state was listed earlier this year as one of Truth in Accounting’s most improved states for timeliness releasing 2013 year-end financial reports.

Despite some progress, Weinberg has continued to criticize Hawaii for “ignoring related employee compensation cost.”

She said the administration claimed it met the state’s constitutional balanced budget requirement, while putting off more than $600 million of compensation costs related to retiree benefits.

Hawaii’s next governor will have to deal with taxpayers’ substantial debt, but Abercrombie won’t have that responsibility.

---30---

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT