PROVIDENCE – Rhode Island ranks No. 34 in Truth in Accounting’s 2016 Financial State of the States, released Thursday.
The government-focused accounting organization rates states by the amount of estimated debt divided by the number of taxpayers in each state.
TIA estimated that Rhode Island owes $9.9 billion, with $4.9 billion in available assets, causing a $5.1 billion shortfall in capital between assets and debt. This averages $13,600 for each taxpayer in the state.
Alaska ranked No. 1 in the study with a surplus of $32,900 per taxpayer. New Jersey ranked last in the nation with a shortfall of $67,200 per taxpayer.
The study took state’s total assets, subtracted capital assets and restricted assets to produce a figure to represent “assets available to pay bills.” Money needed to pay bills was then subtracted from the assets available total. The calculation for money needed to pay bills includes “unreported” pension and retiree health care debt, what the report calls “hidden debt.”
Of Rhode Island’s total debt, TIA estimates that $5.5 billion is in bonds, $2.2 billion in “other liabilities,” $3.4 billion in unfunded pension benefits and $716.8 million in unfunded retiree health care.
Rhode Island’s hidden debt was calculated to be $640 million in 2016. The report gives the state a D, highlighting the fact that Rhode Island has a balanced budget requirement and therefore should not have a taxpayer “burden.” States with a D were calculated to have a per taxpayer burden between $5,000 and $20,000.
Massachusetts and Connecticut ranked in the bottom five states in the nation for tax burden in the report. Massachusetts was estimated to have a $32,900 tax burden per taxpayer (No. 46), while Connecticut was estimated to have a $49,500 tax burden per taxpayer (No.48).
TIA said that in 2016, 41 states in the United States did not have enough money to pay off their bills. TIA estimates the total shortfall of states in the nation is $1.5 trillion. Most of the debt, the organization said, comes from unfunded retiree benefit promises, such as pension and retiree health care debt.
Chris Bergenheim is the PBN web editor.
