Iowa is one of the few states in the country that has enough money to pay all of state government's bills, according to a new report from Truth in Accounting.
The Chicago-based non-partisan think tank says that Iowa “owns more than it owes,” giving the Hawkeye State a B grade for its financial situation.
“Iowa and its taxpayers should be thankful,” Bill Bergman, director of research for TIA, said.
Iowa has $9.3 billion in available assets and $8.5 billion in bills, according to TIA.
“Iowa is among a small group of states that have responsibly managed the public purse,” Bergman told The Center Square. “Iowa has managed to keep money available for future bills, which is fair among 50 states. Iowa ranks among the top 20 percent of the states by our metrics for the overall financial condition of the state."
Most states have accumulated more debt than they have in assets, in large part because of underfunded public employees retirement costs tied to pensions and health care.
TIA calculates the taxpayer burden according to the amount of money each taxpayer would have to pay for the state to pay all of its existing debt. A taxpayer surplus is the amount of money left over after all of a state’s bills are paid, divided by the estimated number of taxpayers in the state.
The average taxpayer burden across all 50 states to cover the debt is $8,400, and 40 state governments are unable to pay their bills. Nine state governments accumulated debt to the point where the taxpayer burden exceeds $20,000, according to the analysis.
Iowa has a taxpayer surplus of $700.
“That’s the basis on which we see Iowa in its overall financial condition,” Bergman said. “It has managed to keep a stable, if not positive, financial position. For all three main categories of public debt – bonded debt, unfunded pension benefits, and unfunded retiree healthcare – Iowa has done a good job of not allowing all these to run away from the current assets available to pay debts in the future.”
TIA also said Iowa has become more transparent with its fiscal condition.
“Iowa and other states have become more transparent over the last few years, thanks to the Generally Accepted Accounting Principles (GAAP) set by the Governmental Accounting Standards Board (GASB), which now require governments to disclose pension (GASB 68) and other post-employment (GASB 75) benefits on their balance sheets,” the nonprofit said.