At the end of fiscal year 2023, 27 states did not have enough money to pay their bills. Indiana was not one of them.
In fact, Truth in Accounting’s Financial State of the States report gave Indiana a ‘B’ grade, ranking it 15th in the nation.
“Indiana, like most other states, improved its financial condition in 2023. This is a positive development, and Truth in Accounting applauds the state’s commitment to improving its fiscal solvency. The state increased its money available to pay bills by $3 billion. This means the state had a Taxpayer Surplus of $3,600, earning it a ‘B’ grade,” the report found.
Indiana closed its fiscal year books in June with $2.6 billion in reserves.
The group analyzes complex Annual Comprehensive Financial Reports, commonly referred to as ACFRs, into simpler explanations.
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“Since all levels of government derive their just powers from the consent of the governed, government officials are responsible for reporting their actions and results in transparent and understandable ways to the people. Providing accurate and timely information to citizens and the media is essential to government responsibility and accountability,” the report said. “A lack of transparency in financial information, budgets, and financial reports makes it difficult for governments to meet this democratic responsibility.
The report lauded state lawmakers for contributing an extra $2.5 billion to the state’s legacy teachers’ retirement fund; having revenues exceed expenses; and maintaining its low debt level.
It did note, however, that “market fluctuations in pension values, coupled with uncertainty around inflation and employment, make it challenging to predict the future resources needed to sustain government services and benefits.”
Indiana had $37 billion in assets available to pay bills, and its total bills were $28 billion. The total bills included $6.7 billion in unfunded pension liabilities and $170 million in unfunded retiree health care benefits.
Collectively, states had $2.9 trillion in debt and $2.1 trillion in assets. Unfunded retirement liabilities account for most of the deficit.
The report highlighted the best five states — or Sunshine States — as North Dakota, Alaska, Wyoming, Utah and Tennessee. The five worst sates — or Sinkhole States — were California, Massachusetts, Illinois, New Jersey and Connecticut.
The only negative note for Indiana was its delay in filing its annual financial report. According to the Government Finance Officers Association (GFOA), the standard for states to publish their annual reports is 180 days after the end of the fiscal year. Indiana was tardy at 202 days.
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