On the anniversary of the attack on Pearl Harbor, we recall warnings that were not clearly understood or heeded. The result was a painful surprise for Americans, and a traumatic experience for those directly involved.
Since 2009 Truth in Accounting has sounded warnings about state finances. We highlight critical information not clearly understood by citizens and elected officials due to faulty government accounting practices. Painful surprises in the form of municipal bankruptcies and pension restructuring are some of the traumatic outcomes.
During the economic recovery that began in 2009, states had the opportunity to improve the condition of their pension funds by contributing money needed to be confident they could pay pensions promised to employees. Yet in 8 states the problem (called "unfunded liabilities") got worse.
Between 2009 and 2012, California, Delaware, Michigan, Montana, Nebraska, North Carolina, Ohio and Pennsylvania, allowed their pension funds to deteriorate. Their pension funds required more dollars in 2012 than were needed in 2009 to fully support their promises. These states are taking on water in their own ships, despite warnings of potential problems paying pensions promised to future retirees.