(By Jacob Mathews/The Center Square) — A review of Louisiana’s financial statements found the state to be in a less than stellar financial position, costing taxpayers thousands.
The nonprofit think tank Truth in Accounting reviewed every state’s finances in fiscal year 2023. For most states, fiscal 2023 ran from June 1, 2022, to June 30, 2023.
In many states, the law mandates a balanced budget, meaning the state’s expenses should not exceed its revenues within that fiscal year. In states where this was not the case, elected officials often excluded certain costs from their budget calculations, such as future pension obligations or deferred maintenance.
This practice essentially shifts these financial responsibilities onto future taxpayers, leaving them to cover the expenses that should have been accounted for in the current budget.
Louisiana was one of 27 states that could not cover all its financial obligations for the year, and it ranked 43 overall with a D grade.
The Pelican State had $30 billion available to pay $48.9 billion worth of bills, meaning $18.9 billion was needed in order to meet the requirements of their budget. After this number was divided out, the nonprofit found the burden to be $13,400 per taxpayer.
Despite the deficit, Louisiana, along with most other states, improved its financial condition in 2023. This is a positive development, and Truth in Accounting applauded the state’s commitment to improving its fiscal solvency.
The state increased its money available to pay bills by $3.9 billion.
Louisiana’s revenues also exceeded expenses. However, the most of Louisiana’s improvement in its financial condition was because it experienced a $2 billion decrease in unfunded retiree health care benefits due to a higher discount rate and revised actuarial assumptions.
Unfunded pensions and other post-retirement benefits still continued to impair Louisiana’s ability to pay its bills. Inflation, market volatility, and other economic factors could further impact the state’s financial situation.