Texas likes to pride itself on low taxes, reasonable regulations and a sound fiscal policy. But a new report says the Lone Star State is not as fiscally sound as advertised. The annual Financial State of the States report from the group Truth in Accounting (TIA) grades all 50 states for their fiscal health. And Texas gets a D grade for 2017.
Sheila Weinberg, founder and CEO of Truth in Accounting, says the state grades are based on the estimated individual taxpayer burden. "That is the amount of money that future taxpayers will be paying to cover bills that have already been accumulated," she tells KTRH. For Texas, that taxpayer burden adds up to $8,600 per person for 2017.
Despite a new two-year budget passed earlier this year and a special session over the summer, the Texas taxpayer burden is growing---it was $7,700 per person last year, according to TIA. "Citizens there in Texas have been told every year that their budget is balanced, that they're meeting that requirement...yet, the elected officials have been putting the state further and further into debt," says Weinberg. "If the budget was balanced, then they would not need any money to pay for prior bills, and they would have a taxpayer burden of zero."
Most of those unfunded obligations are for future pension and retiree healthcare benefits, which add up to $69.3 billion in Texas, according to TIA. Weinberg says that rather than fund those obligations in every budget, lawmakers simply push them off into the future in order to make the budget balance.
Houston has dealt with similar issues for pension and retiree benefits, so it's not surprising that the TIA has the Houston taxpayer burden even higher---$11,700 per person. Combined with the state taxpayer burden, that means the average Houstonian has a taxpayer burden of $20,300.