CHICAGO — A new accounting rule is requiring Connecticut to come clean about its hidden pension debt, but the state continues to exclude billions of health care debt from its financial statements. This information is released today in a report titled, The Financial State of Connecticut, 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Because this pension rule was not required in previous years, state officials used outdated accounting methods to calculate the state’s debt.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, Connecticut's reported pension debt increased from $2.6 billion in 2014 to $26.2 billion in 2015.
“We’re glad to see Connecticut state officials are finally reporting accurate pension debt figures in their financial reports – we’ve been encouraging this for years,” said Sheila Weinberg, Founder and CEO of TIA. “But taxpayers are still not getting the truth and that is a problem.”
State officials did not report $13 billion of retiree health care benefits in their most recent financial report. When this hidden debt is included in Connecticut’s financials, the total amount of bills the state has to pay is $69.6 billion. TIA researchers subtracted the state’s available assets from this amount and discovered the state needs $58.4 billion to completely pay its bills. When this debt is divided amongst Connecticut taxpayers, each owes $45,900 – the state’s taxpayer burden.
“While these numbers are big and scary, they have real consequences. They may be one of reasons many companies, like GE, are leaving the state,” said Weinberg.
Data is derived from the state of Connecticut'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.
Katherine Oxenreiter
312-589-5104
koxenreiter@truthinaccounting.org
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