The annual report on the financial well-being of the states by Truth in Accounting (TIA) finds Kansas at #28 nationally, but faults all states for their lack of transparency in considering their indebtedness, including unfunded retirement obligations, in their financial reports to their taxpayers.
From their Executive Summary of this year’s report:
This is Truth in Accounting’s seventeenth edition of the Financial State of the States report, which provides a comprehensive analysis of the fiscal health of all 50 states. We embark on this research because we believe taxpayers and citizens deserve clear, honest, and transparent financial information from their governments. We analyze and simplify lengthy, complex, and sometimes misleading Annual Comprehensive Financial Reports, commonly referred to as ACFRs, into straightforward numbers and explanations.
TIA supports legislation regarding the regulation of governmental pension systems like those in the private sector covered by the Employee Retirement Income Security Act (ERISA):
In the past, employers, including large corporations, often took risks with employees’ retirement benefits and underfunded their plans. So Congress passed ERISA to protect employees’ retirement accounts, but it exempted state and local governments from the same strict funding and reporting rules. Since that law, most private employers have moved away from defined benefit plans. Truth in Accounting encourages elected officials to strengthen transparency and accountability by supporting reforms that would bring government pension plans under the same standards as private-sector plans. By applying ERISA-like principles to public pensions, elected leaders would be held accountable for fulfilling their contractual obligations to government employees, and taxpayers would gain a clearer understanding of the full cost of these long-term commitments..
Using its methodology for assessing indebtedness and unfunded pension liabilities, TIA calculated the “taxpayer surplus” of states with revenues exceeding those expenses and the “taxpayer burden” of those with expenses exceeding revenues. As this table shows, Kansas has a taxpayer burden of $1,100 per capita, earning the Sunflower State a letter grade “C”.
The summary below reflects how Kansas fared in the TIA study.
