First State Times

A new report by a Chicago think tank finds Delaware’s 2018 taxpayer burden is among the highest in the nation, largely due to unfunded pensions and retiree health care benefits.

“Delaware needs about $9 billion in order to pay its bills, that’s how much debt they have,” Sheila Weinberg, Truth in Accounting's founder and CEO, told the First State News.  “They just beat out the bottom five for taxpayer burden, they are 45 instead of 46.”

To cover that shortfall, the state would need an additional $27,100 per taxpayer, which earned its finances an “F” grade from Truth in Accounting.

Although Delaware’s overall finances improved 9 percent compared to 2017, the state has not funded $1.7 million in pension and $9.1 billion in retiree health care benefits.

“Every state except Vermont has a balanced budget mandate so they don’t get into these financial holes,” Weinberg said. “But because of the bad accounting that they do when they calculate the budget. They can hide the true cost of government.

“For example, they promise employees retiree health care benefits. The employees earn those benefits and the state incurs a liability but because they are not paying a current check for that, they don’t include those costs in the balanced budget requirement calculations.”

Under a fact-based budgeting system, a state includes all its compensation costs, Weinberg said.

“There is a little bit of good news with Delaware,” she added. “While the numbers aren’t good and they are not doing a good job of funding their pension and retiree health care benefits, their latest audited financial reports show they are at least being more transparent.” 

The other eight states to receive a failing grade from Truth in Accounting were California, Connecticut, Hawaii, Illinois, Kentucky, Massachusetts, New Jersey and New York. Maryland, which had a taxpayer burden of $15,500, received a grade of “D.”

“We really believe that this isn’t just a numbers game,” Weinberg said. “It really hurts our representative forms of government when our elected officials don’t have the financial information they need to be knowledgeable participants in that government.”