Unfunded Pensions at State Level…guess who will pay this?

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We have been curious about Governor Kasich’s $2 Billion “rainy day” fund, and how he has impacted Lake County.  We wrote in a previous post that Governor Kasich reduced the amount of State funding for Local Government funds.  Since 2009, Lake County has experienced a $70 million decrease in State funding that required increases in local taxation.

We were reviewing the State of Ohio’s FY 2016 financial report and uncovered these  facts:
Here is a page from the State’s FY 2016 Financial Report:
State of Ohio FY 2016 Balance Sheet

  1.  The State had a $9.09 billion deficit in “unrestricted government activities”.
  2.  Of the $9.09 billion deficit, $8.08 billion is bond debt issued for future construction projects not yet completed.
  3. There is an unfunded pension liability for State employees of $3.8 billion.
  4. The State’s Budget Stabilization Fund (Rainy Day Fund) balance of over $2 Billion in included in the “unrestricted government activities”.  [$8.08 + $3.8 – $2.0 = ~$9.09]

(Comment: When I hear that we have a balanced budget from politicians, I take it with a “grain of salt”. To me when you show a negative balance in the “unrestricted” position that is not balanced.  Perhaps it is just “government math”….as a friend once told me: “You just do not understand government math”…….maybe he is right.  However, I raise a warning flag to all citizens about the looming crisis of unfunded pension liabilities through-out our state, local governments, and public schools.)

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