Politics & Government
Indiana State Finances Receive a Grade of “C”
A new study of Indiana's finances reveals the state does not have enough assets to cover its debt.
Despite being in much better shape than Illinois or Michigan, Indiana is still a sinkhole state when it comes to its financial condition. Repeated decisions by state officials have left the state of Indiana with a debt burden of $5.6 billion, according to Truth in Accounting's (TIA) analysis of Indiana's most recent financial filings. That burden equates to $2,700 for every Indiana taxpayer, slightly higher than it was in 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 their report for 2016, Indiana only has $24.5 billion of assets available to pay bills totaling $30.1 billion. This means that the state has $5.6 shortfall and a $2,700 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, Indiana has to report its pension debt on its balance sheet. This year, the state's reported pension debt grew from $11.9 billion in 2015 to $13.4 billion in 2016. Despite reporting most of its pension debt, the state is still hiding most of its retiree health care debt. Indiana's total hidden debt amounts to $995.7 million. A new accounting standard will be implemented in two years, which will require states to report this debt on the balance sheet.
The bottom line is that Indiana would need nearly $3,000 from each of its taxpayers to pay all of its bills, so it has received a “C” for its finances from Truth in Accounting.
See how Indiana compares to Iowa, Illinois and Michigan: http://www.statedatalab.org/c/89fU5dxUb2df72b.
Click on the link to go to an interactive chart at Truth in Accounting’s State Data Lab.
