Connecticut has $59.8 billion in unfunded liabilities, according to the Institute for Truth in Accounting, which amounts to $46,100 per taxpayer.
In its Financial State of Connecticut report, IFTA shows the state has $69.9 billion in liabilities, but only $10.1 billion in assets to offset those liabilities.
Divided across the state’s entire population of 3.5 million, the $59.8 billion shortcoming amounts to about $17,000 per man, woman and child.
“As a new resident of Connecticut, I was shocked to see that my new home state had an accumulated unfunded burden of about $46,000 per taxpayer as of June 30, 2009 and growing rapidly,” said David Walker, founder and CEO of the Comeback America Initiative and former Comptroller General of the United States. “This is the highest burden per taxpayer of any state calculated by the Institute for Truth in Accounting. Connecticut’s new governor must lead the charge to restructure state government, including the serious unfunded pension and retiree health obligations facing the state’s taxpayers.”
The data in the report comes from Connecticut’s 2009 Comprehensive Annual Financial Report. The report is compiled by the Comptroller’s office according to Generally Accepted Accounting Principles.
The report is a supplement to the state budget, which does not use GAAP principles, but its own unique accounting system.
Governor-elect Dan Malloy promised during his campaign to adopt GAAP accounting for state finances. His running mate, Nancy Wyman, is the current comptroller who compiled the latest CAFR. Wyman has also lobbied for a transition to GAAP accounting at the state level.
Connecticut already requires municipalities and school boards to use GAAP accounting and most private companies are required to use them as well.
The report calls Connecticut’s accounting practices “antiquated.”
A spokesman for the Malloy transition did not respond to requests for comment on the report.
According to IFTA, the state has $29.3 billion in assets, but $14.8 billion of that is infrastructure and $4.4 billion is restricted by law or contract. This leaves only $10.1 billion in assets to offset the state’s liabilities.
Those liabilities are made up of:
- $26 billion in retiree healthcare benefits
- $22.7 billion in bonds
- $15.9 billion in unfunded pension benefits
- $5.3 billion in other liabilities
“To truly balance the state’s budget, the governor and legislature should not push our costs into the future,” said Sheila Weinberg, founder and CEO of IFTA. “And a state budget is not balanced if the retirement plans are not adequately funded.”