Pennsylvania received a decent score when it comes to its financial transparency, but the commonwealth has room for improvement, a new analysis found.
Truth in Accounting gave Pennsylvania a total transparency score of 85 (B). Overall, the Keystone State ranked No. 16.
The organization based its grades on a range of what it calls “transparency indicators.” These indicators include whether states received a clean opinion from an independent auditor and whether they report all retirement liabilities on its balance sheet.
“They got a lower score, but some of it’s easy to fix,” said Sheila Weinberg, founder and CEO of Truth in Accounting.
Idaho, North Dakota and Nevada topped the organization’s list, each racking up a score of 88, the report found. Vermont, North Carolina and Connecticut rounded out the bottom with scores of 58, 56 and 50, respectively.
Pennsylvania was one of five states the organization dinged for not reporting liabilities related to teacher pension systems. The organization did so because the states either provide the majority of the funding for schools or the states indirectly fund the schools’ pension contributions.
It also gave lower marks – three out of five – for accessibility based on how easily residents could find the report. “They could easily fix that and make it so it’s easier for people to find,” Weinberg said.
Separately, Truth in Accounting gave Pennsylvania a grade of D for its taxpayer burden. The organization considers the state a sinkhole state, as each taxpayer owes $17,100 to cover the state’s liabilities.
The commonwealth has $39.7 billion available to pay its bills totaling $114.7 billion. Of the $122.4 billion in retirement benefits promised, state leaders have not funded $40.3 billion in pension and $24.9 billion in retiree health care benefits, Truth in Accounting found.
The Keystone State’s finances are a hot-button issue. An “underlying structural imbalance” in Pennsylvania’s budget could have long-lasting ramifications for the state, particularly as its population continues to age, a report from the Independent Fiscal Office found.
State Sen. Kristin Phillips-Hill, R-York, is leading the push for a constitutional amendment to require all supplemental spending by the governor to be voted on as a separate bill, a move proponents say would increase transparency. Separately, state Rep. Ryan Warner, R-Fayette, and state Sen. Camera Bartolotta, R-Carroll Township, introduced the Taxpayer Protection Act, a move they say would establish “commonsense limits” on the growth of state government spending.
“Without restraints on budget growth and unauthorized spending by the governor, taxpayers at every level will inevitably be squeezed with increased taxes,” Commonwealth Foundation Vice President and Chief Operating Officer Nathan Benefield said in a statement. “Legislators can protect their constituents from massive tax hikes in the future by passing these commonsense reforms now.”