Blame 'Retirement Liabilities' for Florida's $11.5 Billion in Off-the-Books Debt
Around the State
Balanced budgets aside, Florida’s finances aren’t on solid ground, a fiscal watchdog group says.
Not if you include $11.5 billion in missing debt.
Calling it a “sinkhole state,” the Institute for Truth in Accounting, a Chicago-based economic think tank, ranks Florida 38th-worst when it comes to each taxpayer’s share of total state debt.
The nonpartisan research group produces financial reports aimed at exposing costs that don’t show up in state accounting books. Its 2013 State of the States report cites more than $1 trillion of debt across all 50 states.
In Florida it found an $11.5 billion budget shortfall. The unreported debt stems from compensation and other costs that are pushed into the future.
Notably, 90 percent of the state’s retirement liabilities aren’t clearly disclosed, according to TIA. Because of current accounting methods, $1.4 billion appeared on Florida’s balance sheet.
“Since employee retirement benefits are not immediately payable in cash, the related compensation costs have been ignored when calculating balanced budgets,” a Florida analysis reads.
The figures are based on Florida’s Comprehensive Annual Financial Report ending June 30, 2013.
It all depends on how you count it, says TIA.
Lawmakers gain political favor by promising certain benefits, such as retirement compensation, but money isn’t put aside to pay for them, the report states. The result is that taxpayers foot the bill sometime down the road, without receiving public services for their money.
“Citizens need more transparent financial information,” Sheila Weinberg, the accounting group’s founder and CEO, told Watchdog.org.
“These reports publicize accurate, timely and transparent accounting information so that our fellow citizens can be better informed about the true nature of our states’ deficits,” she said.
Still, gaining traction on budgeting and accounting issues can be challenging, Weinberg acknowledged. Voters’ eyes tend to glaze over when it comes to financial spreadsheets. But at 5 percent of an average Floridian’s personal income of $41,692, the state’s tax burden is serious business.
It’s also an improvement.
In 2010, individual taxpayers were saddled with a $2,900 share of state debt. That decreased by $200 over the next two years and dropped to $1,900 in 2013.
Things may be moving in the right direction, but the confusing accounting practices persist.
On that point, TIA has a clear message: “We call on governments to truthfully balance their budgets by including all real and certain expenses when incurred, not when paid.”
William Patrick covers government waste, fraud and abuse for Watchdog.org's Florida bureau. His work has appeared on numerous media websites, including Fox News and the Drudge Report. email@example.com