Massachusetts Finances Get an “F”

Massachusetts finances continue to crumble due to repeated decisions by state officials. They have left the commonwealth of Massachusetts with a staggering debt burden of $82.9 billion, according to Truth in Accounting's (TIA) analysis of Massachusetts' most recent financial filings. That debt burden equates to $32,900 for every Massachusetts taxpayer, which is $2,600 more 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 report for 2016, Massachusetts only has $20.9 billion of assets available to pay bills totaling $103.7 billion. This means that the commonwealth has an $82.9 billion shortfall, which breaks down to $32,900 per taxpayer. This taxpayer burden™ 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, Massachusetts had to report its pension debt on the face of its balance sheet. This year, the commonwealth's reported pension debt grew from $26.3 billion in 2015 to $35.4 billion in 2016. Despite reporting most of its pension debt, the commonwealth is still hiding most of its retiree health care debt. Massachusetts' total hidden debt amounts to $15.3 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 Massachusetts would need more than $30,000 from each of its taxpayers to pay all of its bills, so it has received an “F” grade for its finances from Truth in Accounting.

See how Massachusetts compares to Connecticut, New York and Pennsylvania: http://www.statedatalab.org/c/hoQbjfwr97ae2bf
Click on the link to go to an interactive chart at Truth in Accounting’s State Data Lab.