BATON ROUGE, Louisiana – Louisiana did not have enough money to pay all of its bills in fiscal 2020 despite significant federal funding, according to a Chicago-based tax watchdog.
The result is $ 18,700 owed by Louisiana taxpayer, the group said.
The conclusion comes from Truth in Accounting (TIA), a non-partisan financial transparency firm that analyzes government reports and puts the data in terms the general public can understand.
The organization has just been released State financial statement The assessment uses the full annual financial report and pension plan report required by each state to determine its overall financial position.
Louisiana ranked 40th out of 50 states, scoring a D score in the report.
“Louisiana’s elected officials have repeatedly made financial decisions that have left the state with a debt of $ 22.3 billion,” the report said. “Louisiana did not have enough money set aside to deal with the pandemic and the state has been in bad fiscal position for years.”
Most of Louisiana’s financial problems stem from unfunded pension obligations that have built up year after year, according to the report.
TIA CEO Sheila Weinberg, a chartered accountant, said Louisiana has an unfunded pension liability of $ 11.3 billion and an unfunded retiree health care liability of $ 9 billion.
âMost of the money they need has basically been put on taxpayers’ credit cards,â Weinberg said. “Instead of including these costs in current budgets, they are being pushed into the future.”
The Louisiana Employee Retirement System (LASERS) is the state’s largest pension plan with approximately 100,000 current and former public employees. According to his actuarial valuation For fiscal 2020, the defined benefit pension plan had an unfunded liability of $ 7 billion, interest payments of $ 532 million and an investment loss of $ 430 million.
However, LASERS recently claims a return on investment of 35.6%, its highest in 75 years. The recovery was attributed to changes made after fiscal 2020, which included many uncertainties related to COVID-19.
âWhile pleased with this year’s historic performance, I must stress that LASERS is a long-term investor, investing through multiple economic cycles,â said Bobby Beale, chief investment officer for the plan.
While Louisiana and almost all other states are required to balance their annual budgets, Weinberg explained that retirement debt is allowed to stay off the books.
The TIA report lists 39 state governments that did not have enough money to meet their accountability obligations in the previous fiscal year, despite federal help received from the CARES (Coronavirus Aid, Relief and Economic Security) and other federal grants related to COVID-19. Overall, the majority of state finances have deteriorated, according to the report.
The report assigned each state a taxpayer burden figure, determined by dividing the amount of unpaid debts by the number of taxpayers in a given state. While Louisiana immediately ranked ahead of New York and California, it was well ahead of the last three states – Illinois, New Jersey and Connecticut – with a tax burden of $ 57,000; $ 58,300; and $ 62,000, respectively.
Eleven states had positive tax burdens, meaning lawmakers had paid off all obligations and had money to spare, mostly due to multibillion-dollar federal pandemic infusions. Alaska ($ 55,100), North Dakota ($ 39,200) and Wyoming ($ 19,500) were the top three.
Weinberg said keeping large public debts outside of balanced budget requirements allows lawmakers to claim fiscal responsibility, which can be misleading. She also said it allows them to sidestep responsibility.
âIf lawmakers were to fund all the liabilities and live within their means, that would require raising taxes and people might not vote for them; or cut expenses or benefits and people might not vote for them, âshe said. âThe problem is, most people don’t know it, so they don’t really have a choice.