Promising Too Much Endangers Hawaii's Fiscal Health
by Keli'i Akina, Ph.D., President/CEO, Grassroot Institute of Hawaii
When a child is born in Alaska, that child can count on $52,300 in wealth that the state government has stored away per citizen. But when a child is born in Hawaii, he or she can count on $26,500 in debt that the state owes per citizen.
Truth in Accounting has released their annual ranking of the Financial State of the States, and the findings illustrate the wide gulf between the states that have accumulated a taxpayer surplus (like Alaska) and the 'sinkhole' states that have burdened taxpayers with large amounts of unfunded debt (like Hawaii).
What's the difference? Some claim that it's because Alaska is rich in natural resources and infrastructure that Hawaii does not have. But that's not sufficient to explain why Alaska has great wealth per citizen and Hawaii has great debt per citizen.
According to Truth in Accounting, which has ranked Alaska #1 among the states in fiscal health and Hawaii #45, the difference has to do with the way state leaders manage the finances of the state: "Alaska's elected officials seem to promise only the amount of benefits they can afford to pay."
Hawaii, on the other hand, through decades of unfunded pension benefits, unfunded retirees healthcare benefits, and other liabilities, has made commitments the state cannot afford unless they are paid by future generations.
Truth in Accounting continues its analysis of Hawaii: "Unless these pension and retirees health care benefits are renegotiated, future taxpayers will be burdened with paying for these benefits without receiving any corresponding to government services or benefits."
At Grassroot Institute, we are promoting policies that will raise our state's ranking in fiscal health and move us out of debt and into wealth. In truth, it starts with a very simple best practice: Spend only what we can afford.
Related: Hawaii 6th Worst Sinkhole State