Hawaii Finances Still in Peril
From Truth in Accounting, April, 2017
Repeated decisions by state officials have left the state with a staggering debt burden of $13.1 billion, according to Truth in Accounting's (TIA) analysis of the most recent financial filings. That burden equates to $27,100 for every Hawaii taxpayer.
These statistics are troubling, but what's more troubling is that state government officials continue to obscure large amounts of retirement debt on their balance sheets, despite new rules to increase financial transparency. This skewed financial data gives state residents a false impression of their state's overall financial health.
Here’s The Truth:
- $13.1 B -- money needed to pay bills
- $27,000 -- taxpayer burden
- F -- Hawaii's financial grade
- Hawaii has $6.3 billion available in assets to pay $19.5 billion worth of bills.
- The outcome: A $13.1 billion shortfall and a $27,100 taxpayer burden
- Despite reporting most of its pension debt, the state continues to hide much of its retiree health care debt. The state's total hidden debt amounts to $4.8 billion.
Hawaii owes more than it owns
- Hawaii's Taxpayer Burden™ is -$27,100, and received an "F" from TIA
- Hawaii is a Sinkhole State without enough assets to cover its debt
- Elected officials have created a Taxpayer Burden™, which is each taxpayer's share of state bills after its available assets have been tapped
- TIA's Taxpayer Burden™ measurement incorporates both assets and liabilities, not just pension debt
- Hawaii only has $6.3 billion of assets available to pay bills totaling $19.5 billion
- Because Hawaii doesn't have enough money to pay its bills, it has a $13.1 billion financial hole. To fill it, each Hawaii taxpayer would have to send $27,100 to the state
- Because of an accounting rule implemented last year, Hawaii has to report its pension debt on its balance sheet. This year, the state's reported pension debt grew from $5.8 billion in 2015 to $6.1 billion in 2016.
- Despite reporting most of its pension debt, the state is still hiding retiree health care debt. Hawaii's total hidden debt amounts to $4.8 billion. A new accounting standard will be implemented in two years, and will require states to report this debt on the balance sheet.
- The state's financial report was released 183 days after its fiscal year end, which is considered untimely according to the 180 day standard
Bottom line: Hawaii would need more than $20,000 from each of its taxpayers to pay all of its bills, so it has received an "F" for its finances from Truth in Accounting.
Data included in this report is derived from the state of Hawaii's 2016 audited Comprehensive Annual Financial Report and retirement plans' actuarial reports.
Link: Read Report