Pension Ponzi? Your State’s ‘Balanced Budget’ is a Lie

Dear Reader,

More than half the country. Twenty-seven states. And they're flat broke. Let’s cut through the noise—that’s the headline. But the real story? It's buried deep in the numbers. Truth in Accounting’s Financial State of the States 2024 Report tears apart the illusion of balanced budgets, showing you what your state doesn't want you to know. Spoiler alert: it’s ugly.

27 States Are Drowning in Debt

You’re probably asking yourself, how can that many states be broke? Easy. They’re playing with numbers, and guess who’s stuck with the bill? You.

$1.3 Trillion in Hidden Debt

That’s right. Over a trillion dollars they don’t want you to see. Pension and retiree health care promises they can’t keep, piling up debt for future generations. They’re lying to you about their budgets. But don’t worry, they’ll figure it out—by dumping it on you.

Time’s Running Out

Inflation’s climbing. The Covid relief money is vanishing. And when it’s all said and done, guess who’s left holding the bag? You, the taxpayer. These states can’t pay their bills, but that’s not stopping them from saying they’ve “balanced” their budgets. They’re just kicking the can down the road—straight to you.

Let me introduce you to a little term: Taxpayer Burden™. That’s what you’d personally need to cough up to cover your state’s debt. And it’s bad. Really bad.

The States’ Financial Shell Game

Let’s talk numbers. The states owe $2.9 trillion. But guess what? They’ve only got $2.1 trillion to pay it off. That leaves a cool $811 billion shortfall. And the worst part? $1.3 trillion of that is from pensions and retiree health care—promises they made but didn’t bother to properly fund.

And now they’re scrambling, hiding these massive obligations in the fine print of their financial reports. They claim they’ve got balanced budgets, but it’s a complete farce. They’re piling up debt, and they’re pretending everything’s fine.

The Clock is Ticking

Here’s where it gets real. In 2023, 27 states couldn’t meet their financial obligations. But they still claim they’ve got balanced budgets. How? Simple—by leaving out future pension payments, skipping costs like infrastructure maintenance. It’s smoke and mirrors. And when it all blows up, guess who’s left to clean up the mess? Yep, you guessed it—your kids and grandkids.

The numbers don’t lie. States are going broke, and they can’t keep pretending everything’s okay. The debt keeps piling up, year after year.

Inflation’s Rising. Covid Relief is Drying Up.

The Covid money is gone, the economy is slowing down, and inflation’s getting worse. States are running out of tricks to make their books look balanced. And the stock market? It’s been their safety net, but not for long. In 2024, the market’s gains made pension funds look healthier than they are. But those numbers are just on paper. When the market takes a dip—and it will—the real debt is going to hit hard.

States Won’t Stop the Games

Truth in Accounting calls it like it is. States need to stop screwing around with these fake numbers. They need to fund their pensions the way they should’ve been doing all along, cut the bloated spending, and start using FACT-based accounting—real accounting that shows you the real numbers.

But will they do it? Probably not.

Because at the end of the day, the debt’s not going anywhere. And someone’s going to have to pay for it.

That someone is you.

Robert Kiyosaki

Credit: This analysis is based on Truth in Accounting’s Financial State of the States 2024 Report. Truth in Accounting simplifies complex Annual Comprehensive Financial Reports (ACFRs) into clear, honest numbers so citizens and taxpayers can understand the real financial health of their states.