Truth in Accounting has once again created a transparency score for the financial reporting by state governments to encourage the publication of transparent and accurate government financial information.

"In fiscal 2022, 28 states didn’t have enough revenue to pay all of their bills, according to the 14th annual Financial State of the States report, published by the Chicago-based nonprofit Truth in Accounting.

The report provides a comprehensive analysis of the fiscal health of all 50 states based on the latest available data from states’ fiscal year 2022 annual comprehensive financial reports.

New Jersey ranked last for having the worst fiscal health and the greatest taxpayer burden. Not far behind was Connecticut, followed by Illinois, Massachusetts, Hawaii, Kentucky, Delaware, Louisiana, California and Vermont in the bottom ten.

By contrast, 22 states reported surpluses, the majority of which are led by Republican governors."

"Illinois is touting its rainy day fund, which has recently passed the $2 billion mark. However, some financial analysts say the state is lying to itself about its finances.

After an $11.5 million deposit, Illinois' Rainy Day Fund is now $2.005 billion, up from $48,000 in 2017, which would have only allowed the state to run properly for 30 seconds."

Now Available

Our annual report on state fiscal health. Debt among the states improved slightly. Going from $1.2 trillion down to $938.6 billion. 

What happened? 

How did your state do? Read the full report below. 

https://www.truthinaccounting.org/news/detail/financial-state-of-the-states-2023

Every year, for the past fourteen years, Truth in Accounting has released its Financial State of the States report which examines the financial status of the fifty states. This year our report was released on October 11, 2023. One of the data sets we reviewed is the auditors’ reports. Did the state receive an unmodified report for  their Annual Comprehensive Financial Report? Last year I wrote an article for Accounting Today explaining which states did not meet auditing standards for 2021. This is a follow-up to that article.

On Tuesday, August 1, 2023, Greg Bishop of WMAY Springfield's Morning News interviewed me. We discussed the recently unveiled budget summary for FY2024 by the Illinois Commission on Government Forecasting and Accountability (COGFA). This is a bi-partisan Commission that includes Democratic and Republican state senators and house members.

"Sobering Statistics 

The study, called Financial State of the Cities 2023, was done by Truth in Accounting. It has some difficult truths: 50 out of 75 cities could not pay their bills; the combined debt for all 75 cities is $267 billion. Moreover, elected officials didn’t include the cost of government in this figure, instead pushing it onto future taxpayers."

"(The Center Square) – Illinoisans are paying more than other states for their worker's compensation claims.

A report from The Workers Compensation Research Institute looks at all worker's compensation claims over the last 48 months. The numbers show that total costs per claim with more than seven days of lost time in Illinois have grown 2% annually since 2012.

Sheila Weinberg of Truth In Accounting told The Center Square that the overall price of claims in Illinois is substantially higher than the median in other states."

"CHICAGO (WLS) -- With the April 4 runoff election now less than a week away, we're taking a closer look at how the candidates for mayor differ on some key issues.

One that affects every person in Chicago is managing the city's finances and budget.

The country's third-largest city has a $28 billion budget to cover everything from police, fire, schools, parks, garbage pickup and snow removal -- and it's controlled by the mayor."

This year's report found that 31 states did not have enough money to pay all of their bills.

On the heels of credit rating upgrades, Illinois has sold $1.6 billion worth of bonds to fund a pension buyout program and construction projects. As the Chicago Tribune reported, Gov. J.B. Pritzker touted the upgrades lauding Democratic leaders for their work “to make sure that we’re back in good fiscal order, that the state is building its fiscal foundations for the road ahead.” But as Hetty Chang of Moody has stated, ratings are not “public policy report cards, although politicians may use them as such.” Credit ratings do not focus on the overall financial condition of the state; they focus on the likelihood of bonds being paid.

And if the state is in such “good fiscal order,” then why did it need to borrow money?  

Did you know that many cities, such as Chicago and Los Angeles, do not include the financial information of their school districts and other underlying entities in their financial reports and budgets? The result is taxpayers are on the hook for far more debt than they know. To provide a more complete picture of the 10 most populous U.S. cities including their largest underlying government units, Truth in Accounting has released its annual City Combined Taxpayer Burden report.

Includes: Laurence Msall, president of the Civic Federation, said, "We are dramatically better than we were when the pandemic started. ...The governor’s use of the federal revenue support has been effective and fiscally reasonable, and it has helped improve the state’s financial condition, as has the growth in revenue. ... There’s a lot of positives in this budget."

Includes: "S&P Global has Illinois at BBB. Moody’s has the state at Baa2. That’s after upgrades from the agencies last year. Fitch has Illinois at BBB-. [Comptroller Susana Mendoza said,] 'We did not wait until the end of the fiscal year to pay it off and instead finished the repayment last month, nearly two years early, and saved taxpayers an estimated $82 million in interest,' she wrote." 

Includes: "Sheila Weinberg, founder of Chicago-based Truth-in-Accounting, contends those the governor routinely vilifies include “basic mathematicians, the state’s pension-system actuaries, Securities and Exchange Commission officials and those who drafted the state’s latest bond offering." 

Includes: "The state's total required contribution to its five pension funds in fiscal year 2023 is $10.67 billion, according to the funds' most recent actuarial valuations, published in December." 

Includes: "To call this Illinois budget 'balanced' is a bit like a kid announcing to his parents that his savings account reflects that he has managed his spending this year much better than ever before, while conveniently omitting that his grandparents wrote him a big check. Likely on a one-time basis."

Includes: "For starters, Governor Pritzker projected that the state’s General Fund will end its current fiscal year (FY 2022) with an on-budget surplus of almost $1.8 billion. An on-budget surplus simply means that the revenue projected for a fiscal year will exceed the expenditures scheduled for that fiscal year. But any on-budget accounting of the General Fund does not provide a complete picture of its fiscal condition. "

Includes: "As Pritzker proposed the biggest budget in state history, he said the state is in good shape despite the pandemic recession. ... The state's financial situation is helped by federal money and increased state revenues. ... In response to the governor's address, House Republican Leader Jim Durkin issued a statement saying, " 

Includes: "The Democratic governor’s good-news budget proposal promises $1 billion in tax relief and increased investments in education and law enforcement, all while contributing an extra $500 million to the state’s nearly insolvent pension funds and pumping $200 million into its long-dry 'rainy day' fund. ... "