By Jennifer Crull
The Institute for Truth in Accounting provides an annual report about the financial health of Iowa and 49 other states. The last time we reported on this, September 2012, Iowa was ranked No. 8 in the nation and our financial burden per taxpayer was $500.
As we look at the latest report — www.truthinaccounting.org/ — as of the end of 2012, Iowa still is ranked No. 8, but now our tax burden is a surplus of $100 per taxpayer.
As state governments continue to recover from the recession, states are working to decrease their debt and increase the money they have available to pay their bills. In the previous report, there were only six states that had a surplus per taxpayer. In 2012, that number increased to eight, including Iowa.
The new report has the following positive points about our state:
l Iowa beat the 180-day goal of time between the close of its fiscal year and release of its 2012 Comprehensive Annual Financial Report, publishing the report 167 days after the fiscal year-end.
l Outbound moves by people from Iowa in 2012 were 50.14 percent of total moves, down from 52.1 percent in 2011, meaning that moves into the state virtually equaled moves out of it.
l Iowa has the money needed to fund state employees’ retirement benefits and other outstanding bills. Iowa is in good shape because the legislators and governor only have promised residents and employees what they can afford to deliver.
The negative point of the report is about the lack of transparency concerning retirement benefits in the state. Truth in Accounting discovered $2.2 billion of retirement benefits have been promised in the future but not funded. Because of the confusing way the state does its accounting, only $218.1 million of these liabilities are reported on Iowa’s balance sheet.
They also pointed out that unfunded employees’ retirement benefits represent 24 percent of state bills.
These unfunded liabilities have accumulated because state employees have been promised $1.4 billion of pension benefits and $738.2 million of retirees’ health care benefits. Unlike most states, Iowa still has the assets needed to pay them.
So, the state still needs to work on the issue of properly reporting out liabilities on retirement obligations.
Iowa leaders have worked hard in the last three years to take a state that was in a financial spiral and get the budget back in line and keep expenditures in check. Now it is important for the state to focus on the pension system in Iowa.
While the Legislature is in session, take the time to ask your representative or senator about what plans are concerning the pension system in Iowa. If we don’t demand more transparency concerning this issue, how will the state know to change the way they report the information? For while we do have the money to pay our bills now, that doesn’t mean we will in 10 years.
Jennifer Crull is a specialist with the Public Interest Institute, a non-profit, public policy organization in Mount Pleasant. The view expressed in this article are those of the author, not necessarily of the PII. Comments: Public.Interest.Institute@LimitedGovernment.org