Hawaii Taxpayers Are Still Not Getting Truthful Financial Reports
News Release from Truth in Accounting, April 26, 2016
CHICAGO — A new accounting standard is requiring Hawaii to come clean about its pension debt, but the state is still hiding billions of pension and health care debt from its financial reports. This information is released today in a report titled, The Financial State of Hawaii, by Truth in Accounting (TIA), a Chicago-based think tank that analyzes government financials.
Because this pension rule was not required in previous years, state officials used outdated accounting methods to calculate the state’s debt. As a result, Hawaii’s reported pension debt increased from $0 in 2014 to $5.8 billion in 2015. But state officials are still not reporting the correct figures.
“Truth in Accounting has been encouraging lawmakers to produce transparent financials for years and it’s great to see a rule in place,” said Sheila Weinberg, Founder and CEO of TIA. “However, it’s not great to see Hawaii state officials only partially implement this rule, continuing to hide $1.2 billion of pension debt.”
According to TIA’s report, Hawaii has $6.9 billion of pension debt, but state officials are only reporting $5.8 billion. In addition, state officials are also hiding $5.5 billion of total retirement debt.
“This year, State Comptroller Douglas Murdock, brought some transparency to Hawaii’s financial reports, but more needs to be done,” said Weinberg.
TIA researchers recalculated Hawaii’s overall financial position and discovered the state needs $13.6 billion to completely pay its bills. When this debt is divided amongst Hawaii taxpayers, each taxpayer owes $28,500 – the state’s taxpayer burden.
Data is derived from the state of Hawaii’s June 30, 2015, audited Comprehensive Annual Financial Report and retirement plans' actuarial reports.
Founded in 2002, Truth in Accounting is dedicated to educating and empowering citizens with understandable, reliable, and transparent government financial information. Sheila Weinberg is a Certified Public Accountant with more than 30 years of experience in the field.
PDF: 2015 Hawaii Financial Summary
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New Report Says Each Taxpayer's Share of Hawaii's Debt Is $28,500
Grassroot Institute praises increased transparency, calls for fiscal responsibility
News Release from Grassroot Institute
HONOLULU, HAWAII--April 26, 2016--A new report from Truth in Accounting on the financial state of Hawaii has calculated the overall state debt at $13.6 billion, making the individual taxpayer share of those liabilities $28,500. The analysis praises the state for a new accounting rule that requires Hawaii to report pension debt on the balance sheet, but points out that because the state uses 2014 data, there is still $1.2 billion of pension debt that is being hidden from taxpayers.
Because the state has only $5.7 billion available to pay $19.3 billion in bills, Hawaii's debt is approximately $13.6 billion, 83% of which represents unfunded pension and retiree health benefits. Moreover, though the accounting rule requires Hawaii to report the majority of its pension debt, $5.5 billion in retiree health care debt remains hidden from taxpayers.
"Each taxpayer is on the hook for $28,500 which represents their share of the state's unpaid bills, including unfunded pension and retiree health care benefits," said Sheila Weinberg, CEO of Truth in Accounting. "Misleading accounting and budgeting rules have allowed governors and legislators to claim balanced budgets, while the state has been going into debt. Now Hawaii taxpayers will need to come up with $13.6 billion to completely pay the state's bills."
Keli'i Akina, Ph.D., President of the Grassroot Institute, praised the rule that required pension debt to be reported, emphasizing the need for fiscal restraint as well as transparency.
"While the first step is simply acknowledging the extent of the state's unfunded liabilities, we have a big challenge ahead as we try to reform the policies that have led to Hawaii's financial woes," stated Dr. Akina. "Taxpayers cannot forget that when the state makes financial promises, it is doing so with our wallets. Demanding greater accountability and responsibility in spending is the only way that we can hope to ensure a prosperous future for our state."