Bill Bergman, Director of Research at Truth in Accounting, joined Joe Kent to discuss Hawaii’s current unfunded liabilities, particularly, state pension plans. The interview was recorded as part of the Grassroot Institute with Dr. Keli’i Akina, a radio show on KAOI 1110AM, 96.7FM, Mondays on Maui at 7am.
“Hawaii ranks among the 5th or 6th worst in the nation” Bill Bergman stated, in regards to the State of Hawaii’s financial position. “The accumulation of these unfunded promises” Mr. Bergman continued, referring to Hawaii’s unfunded liabilities, “has been a source of cost that has been put off into the future; but we’re starting to see the chickens come home to roost lately.”
Mr. Bergman also gave insight into the effects of these unfunded liabilities, “In states that have found themselves in the type of trouble that Hawaii is in, the social services spending for the lowest sector of the income population has been impacted.”
“The fundamental government services,” Mr. Bergman continued, mentioning education, police, and fire departments, “are being pressured by the financing now, and the requirements for interest expense.”
“Hawaii’s interest expense for the state has actually doubled since 2007, which is pretty remarkable when you consider that long-term interest rates have fallen by 50% in that same time frame.” Bill Bergman mentioned, “since 2007, the state has paid $250 million alone in interest expenses.”
Listen to the full interview here: