Kansas State Finances Get a “D” Grade

Kansas continues to be a sinkhole state when it comes to state finances. Repeated decisions by state officials have left the state of Kansas with a staggering debt burden of $7.2 billion, according to Truth in Accounting's (TIA) analysis of Kansas' most recent financial filings. That burden equates to $7,800 for every Kansas taxpayer, which is $1,300 worse than 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 its report for 2016, Kansas has only $4 billion of assets available to pay $11.2 billion worth of bills. This means that the state has $7.2 billion shortfall and a $7,800 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, Kansas had to report its pension debt on its balance sheet. This year, the state's reported pension debt grew from $2 billion in 2015 to $2.4 billion in 2016. However, the reported debt does not take retirement liabilities for school employees into account, despite the state’s significant funding of public school districts. The actual pension debt is closer to $6.5 billion. In addition, the state continues to hide most of its retiree health care debt, which amounts to $160.4 million. A new accounting standard will be implemented in two years that will require states to report this debt on the balance sheet.

The bottom line is that Kansas would need almost $8,000 from each of its taxpayers to pay all of its bills, so it has received a ”D” for its finances.

See how Kansas compares to Iowa, Nebraska and the United States average: http://www.statedatalab.org/c/gMCoQlsv1c2c80d
Click on the link to go to an interactive chart at Truth in Accounting’s State Data Lab.