The Institute for Truth in Accounting has prepared final calculations for state financial conditions for the three years ended in fiscal year 2011. Preliminary estimates issued in November have been revised, where necessary, to reflect more complete source material and a final audit of data quality.
Revisions were generally small. For example, for IFTA’s “Money Needed to Pay Bills” metric, the revisions totaled (on an absolute value basis) less than 2% of originally reported amounts in 2009 and 2011, and less than 5% in 2010. Only two states had material revisions – Illinois and Texas. In both states additional research and analysis determined additional liabilities for retirees’ healthcare plans.
The Illinois revisions help underscore some of the sources of difficulty for users relying on publicly available state government financial reporting. The Institute for Truth in Accounting has long stressed the incomplete picture for governmental debt on the main financial statements, with large obligations held off the Statement of Net Assets and buried in footnotes or supporting schedules. But state obligations can be hidden even further. An analysis by the Illinois Policy Institute found further Illinois retirement obligations only with the aid of specific Freedom of Information Act requests, and IFTA has revised its calculations for Illinois using this information. As a result, IFTA’s estimate for Illinois taxpayer burden rose nearly 10% in each of 2009, 2010, and 2011.
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