STUDY: Wisconsin Taxpayers Not Getting Truthful Financial Reports

WISCONSIN -- What you don't know about Wisconsin's debt can, in fact, hurt taxpayers in the long run. That's according to Truth in Accounting, a national nonprofit organization that studies and reports on public financing and studies public debt.

According to calculations released this week, Wisconsin’s pension plan is fully funded. However, the state still has $1 billion of retiree health care debt and $538.8 million of that retiree health care debt is excluded off the state’s balance sheet.

“Wisconsin continues to be a great example of how state pensions should be funded,” said Sheila Weinberg, Founder and CEO of Truth in Accounting. “However, we encourage state officials to be more transparent about their retiree health care debt.”

Research found that Wisconsin's retiree health care plan has less than 40 cents for every dollar needed to cover promised benefits. Currently, state officials have promised $1.6 billion worth of health care benefits, but Wisconsin has only $543 million set aside to pay these benefits, according to the Truth in Accounting news release.

“Unless these retiree health care benefits are renegotiated, future taxpayers will be burdened with paying for these benefits without receiving any corresponding government services or benefits,” said Weinberg.

When they dug deeper into Wisconsin's audited Comprehensive Annual Financial Report and retirement plans' actuarial reports, what they found was shocking.

Researchers needed to recalculate Wisconsin's overall financial position and discovered the state needs $9 billion to completely pay its bills. When this debt is divided among Wisconsin taxpayers, each taxpayer owes $4,600 – the state’s taxpayer burden.

Findings:

• Wisconsin owes more than it owns
• Wisconsin has a -$4,600 “Taxpayer Burden”
• Wisconsin is a “Sinkhole State” without enough assets to cover its debt
• Elected officials have created a Taxpayer Burden, which is each taxpayer's share of state bills after its assets available have been tapped
• TIA's Taxpayer Burden measurement incorporates both assets and liabilities, not just pension debt
• Wisconsin has only $9.4 billion of assets available to pay bills totaling $18.4 billion
• To fill the $9 billion financial hole each Wisconsin taxpayer would have to send $4,600 to the state
• Because of a new accounting rule, all states now have to report their pension debts on their balance sheets. Wisconsin has fully funded its pension plan. As a result, the state reported a pension asset of $765.9 million in 2015.
• The state's financial report was released 170 days after its fiscal year end, which is considered timely according to the 180 day goal.

Source: State Data Lab

Image: Truth in Accounting