HONOLULU — Do you feel rich? The Wall Street Journal claims you are, as a fiscal watchdog group says the opposite, citing crushing amounts of government debt.
Hawaii’s median household income is $66,000 a year, up $3,000 over last year. The state has a relatively low unemployment rate of 5.8 percent, and the percentage of population below the poverty line is 11.6 percent, the eighth lowest in the country.
These are the factors the newspaper considered before naming Hawaii the fifth richest state in a recent analysis of the 10 richest and 10 poorest states.
The Chicago-based fiscal watchdog group, Truth in Accounting, released a report Friday that maintains while Hawaii might appear from narrowly-defined statistics to be a “rich” state, residents are actually drowning in “credit card” bills because of government debt.
Adding up state debts, including bonds, unfunded pensions and retirement health care for state employees, each Hawaii resident is saddled with a $39,900 debt, said Donna Rook, president of StateDataLab.org, the data site for Truth in Accounting.
Rook said state governments have accumulated massive debts hidden away from balance sheets, since reporting conventions allow them to hide pension and retirement health promises from residents.
“Citizens deserve to know the truth about the debt their states have hidden from them,” Rook said. “Hawaii’s unfunded pension and retirement health benefits have grown from $12.8 billion in 2009 to $19.8 billion in 2012, and $16.6 billion are not clearly disclosed.”
“Essentially they are charging the costs of current services to ‘credit cards’ whose balances they will hand to future generations to pay,” she added.
The report noted just like credit card balances, these government debts continue to grow.
“The claim they can be “paid off over time” is just as fallacious as handing our children the credit card statements while we continue to purchase things,” Rook said. “Citizens should either pay for current services or accept fewer services, instead of allowing government “credit cards” to accumulate bills their children will have to pay.”