Delaware Finances Receive a Grade of “F”

Delaware finances continue to crumble. Repeated decisions by state officials have left the state with a staggering debt burden of $8.5 billion, according to Truth in Accounting's (TIA) analysis of Delaware's most recent financial filings. That burden equates to $26,300 for every Delaware taxpayer, which is a whopping $6,600 worse for each taxpayer than it was for 2015.

These statistics are troubling, but what's more troubling is that state government officials continue to obscure large amounts of retirement debt on their balance sheets, despite new rules to increase financial transparency. This skewed financial data gives state residents a false impression of their state's overall financial health.

Truth in Accounting is a Chicago-based nonprofit think tank that analyzes state financial reports when they are published. According to its analysis of the the state’s most recent CAFR, Delaware only has $2.9 billion of assets available to pay bills totaling $11.4 billion. This means that the state has an $8.5 billion shortfall and a $26,300 taxpayer burden™, which is each taxpayer's share of state bills after its available assets have been tapped. TIA's Taxpayer Burden™ measurement incorporates both assets and liabilities, not just pension debt.

Because of an accounting rule implemented last year, Delaware had to report its pension debt on its balance sheet. This year, the state's reported pension debt grew from $739.8 million in 2015 to $1.1 billion in 2016. Despite reporting most of its pension debt, the state continues to hide most of its retiree health care debt. The state's total hidden debt comes to $5.5 billion. A new accounting standard will be implemented in two years, and will require states to report this debt on the balance sheet.

The bottom line is that Delaware would need over $25,000 from each of its taxpayers to pay all of its bills, so it received an “F” for its finances.

See how Delaware compares to Maryland, Virginia, and the U.S. average: http://www.statedatalab.org/c/9hvgfXaj21f0762.
Click on the link to go to an interactive chart at Truth in Accounting’s State Data Lab.