Maine State Finances Receive a Grade of “D”

Maine continues to be a sinkhole state when it comes to state finances. Repeated decisions by state officials have left the state of Maine with a staggering debt burden of $4.4 billion, according to Truth in Accounting's (TIA) analysis of Maine's most recent financial filings. That burden equates to $9,700 for every Maine taxpayer, which is $1,300 worse than last year.

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, Maine only has $6.2 billion of assets available to pay bills totaling $10.6 billion. This means that the state has $4.4 billion shortfall and a $9,700 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, Maine had to report its pension debt on its balance sheet. This year, the state's reported pension debt grew from $1.9 billion in 2015 to $2.3 billion in 2016. Despite reporting most of its pension debt, the state continues to hide most of its retiree health care debt. Maine's total hidden debt amounts to $2.5 billion. 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 Maine would need almost $10,000 from each of its taxpayers to pay all of its bills, so it received a “D” for its finances.

See how Maine compares to Massachusetts, New Hampshire and Vermont: http://www.statedatalab.org/c/LR77vGKQ24f35f8
Click on the link to go to an interactive chart at Truth in Accounting’s State Data Lab.