North Carolina's Grecianesque Legacy Cost

Hey North Carolinians, if you think progressive states like California have been fiscally irresponsible, than you need to take a look at what has happened in our own back yard. It seems the Democrats have left us a legacy almost as Grecian as – dare I say it – Greece. Carolina Journal reported the following:

As of June 30, 2010, the state had obligated taxpayers to $60.7 billion in debt, with only $23.1 billion in assets that could be used to pay that debt, leaving an unfunded liability of $37.6 billion.

That means the state has put each taxpayer $14,800 in debt, the report says. The financial burden on North Carolinians is worse than that on taxpayers in 34 other states, landing not too far behind California and New York on a scale of indebtedness. State officials challenge the methods used by the study and say the state's debt situation is much less dire than the institute reports.

A large chunk of North Carolina’s $60.7 billion in future obligations represents health care benefits promised to state employees when they retire.

The institute determined the unfunded liability for retiree health care benefits is $32.9 billion, a larger sum than indicated a year ago in a Carolina Journal report. Unfunded pension benefits make up another $2.5 billion of the debt.

Despite a constitutional requirement that North Carolina government maintain a balanced budget, the state also has accumulated $15 billion in bonds and $16.1 billion in other liabilities. The state can borrow money for capital needs and emergencies, but not for normal operating costs.

Instead of setting aside money for future obligations, most states have been shifting the costs to future taxpayers, the report says. “This is especially true in relation to employee compensation costs, which include retirement benefits.”

Because pension and health care benefits are not immediately payable in cash, states ignore most of these compensation costs when calculating annual budgets, the report continues.

If North Carolina can’t get it fiscal house in order, it will take more than tar on people’s heels to keep them in this state. We will end up like California: a state that consists of illegal aliens, freeloaders, and trial lawyers.

Source: http://www.carolinajournal.com/exclusives/display_exclusive.html?id=9296