New York earns ‘F’ grade for its fiscal health: report

Repeated decisions by elected officials over the years have left the state of New York with a massive debt burden of $143 billion, according to Truth in Accounting's (TIA) analysis of New York’s most recent financial filings. That burden equates to $21,500 for every taxpayer.

New York’s finances are concerning, but what’s even more troubling is that elected officials continue to mislead the public by failing to disclose significant amounts of retirement debt on the state’s balance sheet, despite new rules to increase financial transparency. This skewed financial data gives New York’s residents and taxpayers a false impression of the state’s overall fiscal health.

Hundreds of billions of dollars have been promised to government workers in the form of pension and health care benefits, but the state has set aside less than one percent in assets to fund these promises, notes Sheila Weinberg, the founder and CEO of Truth in Accounting.

“For decades New York governors and legislators have balanced budgets on the backs of future taxpayers," Weinberg said. "The state has promised employees and teachers more than $111 billion in retiree health care benefits, but only set aside $1 billion to fund these benefits. Future taxpayers will have to make up the difference.”

Truth in Accounting is a Chicago-based nonprofit think tank that analyzes state and municipal financial reports when they are published. According to its report for 2017, New York had $277.9 billion worth of bills and roughly $135 billion in available assets after capital and restricted assets were excluded. This results in a $143 billion shortfall and a $21,500 Taxpayer Burden™, which is each taxpayer's share of state bills after its available assets have been tapped. TIA's Taxpayer Burden indicator incorporates both assets and liabilities, not just pension debt.

And because of an accounting rule implemented two years ago, New York must report all of its pension debt on the balance sheet. At the end of the 2017 fiscal year, the state’s reported pension debt was $40.5 billion. And while it reported all of its pension debt, New York continues to hide most of its retiree health care debt, also known as other post-employment benefits. The state’s total hidden debt comes out to $69.7 billion. A new accounting standard will be implemented next year that will require state and local governments to report this debt on the balance sheet.

The bottom line is that New York would need $21,500 from each of its taxpayers to pay all of its bills, which is why it received an “F” grade for its fiscal health.

You can read the full report here.