FOR IMMEDIATE RELEASE
DATELINE: June 1, 2016, Honolulu, Hawai`i
CONTACT: Kelsey Meehan, 808-591-9193, kmeehan@grassrootinstitute.org
Hawaii Ranks #45 in Nationwide Survey of State Fiscal Condition
Grassroot Institute stresses need for policies that reduce debt, tax burden
HONOLULU, HAWAII–June 1, 2016–According to a new study from the Mercatus Center, Hawaii ranks 45th nationwide in state fiscal condition, with only five states (and Puerto Rico) presenting a bleaker economic picture. The 2016 Ranking the States by Fiscal Condition presents a snapshot of every state’s financial health, based on that state’s own financial reporting. The goal of the report is to give citizens the ability to look at complicated financial reports in a larger context, giving them a clear picture of where their state stands financially.
Hawaii’s best ranking (23rd) was in cash solvency, as the state is able to cover short-term obligations. In metrics that consider long-term debt and the state’s unfunded liabilities, the state’s rankings fell dramatically. Hawaii ranked 43rd in budget solvency, long-term solvency, service-level solvency (which considers taxes, revenues, and spending compared to state personal income), and trust fund solvency (which measures state debt).
“[Hawaii’s] net assets are 1 percent of total assets, and total liabilities account for 64 percent of total assets, resulting in a long-term liability per capita of $8,180,” states the report. “Total debt is $7.78 billion. Unfunded pension liabilities are $28.74 billion on a guaranteed-to-be-paid basis, and other post-employment benefits (OPEB) add $11.18 billion in unfunded liabilities. These three liabilities are equal to 73 percent of total state personal income.”
“Once again, Hawaii has performed badly on a national survey of fiscal health, and for the same reason–our state debt,” stated Keli’i Akina, Ph.D., President of the Grassroot Institute of Hawaii. “Every economic study that is done of our state in comparison to the rest of the nation focuses on the long-term damage caused by Hawaii’s unfunded liabilities.”
Dr. Akina continued: “What more do we need to show us that a new way of thinking about our state finances is sorely needed? Between our high tax burden and considerable state liabilities, we are handicapping our economy for at least a generation. It may not be pleasant, but we must consider stronger policies that reduce state liabilities and spur economic growth.”
