(The Center Square) — Separate studies have come to different conclusions on Louisiana’s long-term liability totals, but they all agree Louisiana is in the bottom half in the taxpayer burden for these liabilities.
Net pension liabilities and direct debt are both causes of the taxpayer burden, along with a lack of net assets to pay off liabilities. According to a presentation from Truth in Accounting, the per-capita taxpayer burden in 2023 was $13,400.
Unfunded pensions and other post-retirement benefits are what Truth in Accounting says continues to impair Louisiana’s ability to pay its bills. Unfunded pensions are long-term pensions owed by the state government that aren’t already covered by allocated assets, and these total upwards of $9 billion.
Unfunded retiree health care benefits total about $7.5 billion. These help create the $18.8 billion deficit that taxpayers collectively must cover.
The Fitch Ratings for 2023 tell a similar story, which The Center Square covered previously. According to their report, Louisiana’s total adjusted long-term liabilities reached $17.2 billion, representing 6.4% of personal income, and ranking 34th among states for this burden.
The rise in long-term liabilities comes as a result of weaker pension asset values from 2022 market declines, which reversed gains made in fiscal 2022. Louisiana’s adjusted net pension liability rose to $9.4 billion, or 3.5% of personal income, placing it 30th nationally in this category and slightly above Truth in Accounting’s total.
Meanwhile, the state’s direct debt decreased slightly, with its $7.8 billion representing 2.9% of personal income, ranking 36th.
The difference is, while Fitch says the burden is increasing, Truth in Accounting said it’s down from 2022 and the lowest in years. This is because of an increase in the rate used to discount unfunded retiree benefits to today’s values and other changes in actuarial assumptions.
Unfunded retiree health care benefits decreased by $2 billion as the discount rate increased from 2.18% to 4.09%. In total, the state increased its money available to pay bills by $3.9 billion from 2022, and its revenue exceeded expenses for the year.
The American Legislative Exchange Council had the most negative in numbers but most positive in ranking when evaluating Louisiana’s pension system.
The most recent study was in 2022, but it amounted Louisiana’s unfunded pension liabilities to a whopping $100.9 billion. This big number, however, ranked the Pelican State 28th in ALEC’s study, its highest ranking among any of the analysts
This data point also supports Truth in Accounting’s idea that Louisiana is actually improving its fiscal responsibility.
However, the taxpayer burden pulls Louisiana back down to 35th, with liabilities per capita at $21,759. That’s over $7,000 more than the burden according to Truth in Accounting in 2023.
