South New Castle News

The state of Delaware is saddled with an overall debt burden topping $9 billion, leaving every taxpayer in the state with a burden of more than $27,000 and the state as a whole with an “F” grade for finances according to a report from Truth in Accounting (TIA).

Even as the state’s overall financial condition improved by 9 percent from the prior fiscal year, Truth in Accounting researchers noted the state still remains hamstrung from “Delaware’s elected officials repeated financial decisions.”

For the most part, the state’s problems derive from unfunded retirement obligations, with almost half of the $19.6 billion of promised retirement and retiree health care benefits remaining unfunded.

TIA highlights that the state currently has only $3 billion in assets, or a quarter of the $12 billion in debts it currently owes, casting it as a sinkhole state that does not have enough assets to cover its debts. Delaware's reported net position is estimated to be understated by $77 billion, with the way the state defers recognizing losses incurred when the net pension liability increases accounting for most of the miscalculations, according to TIA.

The state's financial report was released about five months after the fiscal year ended and TIA’s taxpayer burden measurements were calculated using both assets and liabilities along with pension debt.