Ohio Gets A “D” For Its State Finances

Ohio continues to be a sinkhole state when it comes to state finances. Repeated decisions by state officials have left the state of Ohio with a staggering debt burden of $22.6 billion, according to Truth in Accounting's (TIA) analysis of Ohio's most recent financial filings. That burden equates to $5,800 for every Ohio taxpayer, which is $800 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, Ohio only has $45 billion of assets available to pay bills totaling $67.6 billion. This means that the state has $22.6 billion shortfall and a $5,800 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, Ohio had to report its pension debt on its balance sheet.This year, the state's reported pension debt grew from $5 billion in 2015 to $6.9 billion in 2016. Despite reporting most of its pension debt, the state continues to hide $3.1 billion of its retiree health care debt. 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 Ohio would need almost $6,000 from each of its taxpayers to pay all of its bills, so it received a “D” for its finances.

See how Ohio compares to Indiana, Pennsylvania and West Virginia: http://www.statedatalab.org/c/TOGW2mjffe0676d
Click on the link to go to an interactive chart at Truth in Accounting’s State Data Lab.