Montana Gets a “C” For Its State Finances

Montana continues to be a sinkhole state when it comes to state finances. Repeated decisions by state officials have left the state of Montana with a staggering debt burden of $942.6 million, according to Truth in Accounting's (TIA) analysis of Montana' most recent financial filings. That burden equates to $2,700 for every Montana taxpayer, which is $1,200 worse than in 2015.

These statistics are troubling, but what's more troubling is that state government officials continue to obscure large amounts of retirement debt on their balance sheets, despite new rules to increase financial transparency. This skewed financial data gives state residents a false impression of their state's overall financial health.

Truth in Accounting is a Chicago-based nonprofit think tank that analyzes state financial reports when they are published. According to its report for 2016, Montana only has $5 billion of assets available to pay bills totaling $6 billion. This means that the state has a $942.6 million shortfall and a $2,700 taxpayer burden™ which is each taxpayer's share of state bills after its available assets have been tapped. TIA's Taxpayer Burden™ measurement incorporates both assets and liabilities, not just pension debt.

Because of an accounting rule implemented last year, Montana had to report its pension debt on its balance sheet. This year, the state's reported pension debt grew from $1.6 billion in 2015 to $1.7 billion in 2016. Despite reporting most of its pension debt, the state continues to hide retiree health care debt in the amount of $76.1 million. A new accounting standard will be implemented in two years that will require states to report this debt on the balance sheet.

The bottom line is that Montana would need almost $3,000 from each of its taxpayers to pay all of its bills, so it received a ”C” for its finances. While better off than many other states, Montana still owes more than it owns and lags behind its neighboring states, which have taxpayer surpluses. The state's financial report was released 214 days after its fiscal year end, which is considered untimely according to the 180 day standard.

See how Montana compares to Idaho, South Dakota and Wyoming: http://www.statedatalab.org/c/OrqlTptGc0876dd
Click on the link to go to an interactive chart at Truth in Accounting’s State Data Lab.