CHICAGO — A new accounting rule is requiring Indiana to come clean about its pension debt, but the state is still hiding pension debt and health care debt from its financial reports. This information is released today in a report titled, The Financial State of Indiana, 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Because this pension rule was not required in previous years, state officials used outdated accounting methods to calculate the state’s debt.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, Indiana’s reported pension debt increased from $1.1 billion in 2014 to $11.9 billion in 2015. But state officials are still not reporting the correct figures.
“Indiana state officials have been hiding the state’s pension debt for years,” said Sheila Weinberg, Founder and CEO of TIA. “Last year, the state excluded $11.6 billion of retirement debt from the state’s financial report.”
As a result of the new rule, Indiana state officials reported $11.9 billion pension debt in the state’s most recent financial report. According to TIA’s report, Indiana actually has $13.5 billion of pension debt, which means state officials are still excluding $1.6 billion. In addition, state officials are also hiding $651.5 million of retiree health care debt off the state’s balance sheet.
“While Indiana state officials and Governor Pence have made progress, they are still hiding debt from taxpayers,” said Sheila Weinberg, Founder and CEO of TIA. “It’s time for State Budget Agency Director, Brian Bailey, to bring greater transparency to Indiana’s financials by including all debt in the state’s financial reports.”
TIA researchers recalculated Indiana’s overall financial position and discovered the state needs $4.9 billion to completely pay its bills. When this debt is divided amongst Indiana taxpayers, each taxpayer owes $2,400 – the state’s taxpayer burden.
Data is derived from the state of Indiana’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
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