Lawmakers in Pennsylvania have tried to convince their constituents that they have a balanced budget, but due to unfunded liabilities, the state is really running at a $66 billion shortfall. Pensions that will come due down the road make up more than half of the $53 billion in hidden costs, with future health care benefits contributing much of the rest. This is according to the think tank Truth in Accounting’s annual “Financial State of the States” report.
“Unless these pension and retirees’ health care benefits are renegotiated, future taxpayers will be burdened with paying for these benefits without receiving any corresponding government services or benefits,” stated the Truth In Accounting report.
By failing to fund these future burdens, lawmakers of today are saddling the next generation with enormous burdens. Fortunately, such shady bureacratic budget “balancing” will be impossible in the future, as new rules will go into force later this year that require states to include unfunded liabilities on their books.
But for now, too many citizens in Pennsylvania are unaware of the debts their state faces, and the government will remain on shaky ground until it finds a way to reallocate current resources towards the enormous financial commitments the state has already made for worker pensions and health care.
“If we’re not systematically building up these asset bases through higher contributors, we’re going to be at risk long-term,” Rick Dreyfuss, a retired actuary and pension expert with the Manhattan Institute, told Watchdog.com.
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