CHICAGO — A new accounting rule is requiring Kentucky to come clean about its hidden pension debt, but the state continues to exclude billions of pension and health care debt from its financial reports. This information is released today in a report titled, The Financial State of Kentucky, 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Because this pension rule was not required in previous years, state officials used outdated accounting methods to calculate the state’s debt.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, Kentucky’s reported pension debt increased from $3 billion in 2014 to $29.6 billion in 2015. But state officials are still not reporting the correct figures.
“We’ve been encouraging state officials to report all of the state’s pension debt for years and we’re glad to see some progress finally being made,” said Sheila Weinberg, Founder and CEO of TIA. “However, state officials are continuing to ignore the new rule and disclose what they choose and this is unfair to taxpayers.”
According to TIA’s calculations, Kentucky has $33.5 billion of pension debt. Because state officials are reporting only $29.6 billion, they are excluding $3.8 billion off the balance sheet. In addition, state officials are also hiding $1.3 billion of retiree health care benefits.
“While this year is an improvement, State Budget Directors, John Chilton and Governor Bevin, need to be even more transparent by reporting all pension and retiree health care debt,” said Weinberg. “Taxpayers deserve the truth.”
TIA researchers recalculated Kentucky’s overall financial position and discovered the state needs $41.5 billion to completely pay its bills. When this debt is divided amongst Kentucky taxpayers, each taxpayer owes $33,700 – the state’s taxpayer burden.
Data is derived from the state of Kentucky'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.
Contact: Katherine Oxenreiter
312.589.5104
press@truthinaccounting.org
koxenreiter@truthinaccounting.org
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