Report: R.I. 17th highest in nation for long-term obligations

RHODE ISLAND was just above the national aggregate for long-term obligations at 15.1 percent, according to The Pew Charitable Trusts. The national aggregate was 14.8 percent. / COURTESY THE PEW CHARITABLE TRUSTS
RHODE ISLAND was just above the national aggregate for long-term obligations at 15.1 percent, according to The Pew Charitable Trusts. The national aggregate was 14.8 percent. / COURTESY THE PEW CHARITABLE TRUSTS

PROVIDENCE – Seventeen states, including Rhode Island, had total liabilities greater than the national aggregate of 14.8 percent of the 50 states’ personal income in 2013, according to data released Tuesday by The Pew Charitable Trusts in its Fiscal 50 report.
Rhode Island’s total liabilities were just above the national number at 15.1 percent, as unfunded pension costs totaled $4.4 billion, representing 9.1 percent of personal income; unfunded retiree health care costs totaled $714 million, or 1.5 percent of personal income; and debt was $2.2 billion, or 4.5 percent of personal income.
Rhode Island placed 17th among the states for its total liabilities.
In comparison, Alaska’s total liabilities were the highest in the nation at 52.9 percent, followed by Hawaii at 46.1 and Illinois at 31.7 percent. The least encumbered state was South Dakota at 1.1 percent, followed closely by Tennessee, 2.4 percent, and Nebraska, 2.8 percent.
Massachusetts was 10th highest with total liabilities at 20.5 percent of personal income; Massachusetts and Connecticut also tied for the second-highest debt level at 8.8 percent, behind only Hawaii, where it was 10.6 percent of personal income.
Unfunded pension costs – the shortfall between benefits promised to government workers and the savings available to meet those obligations – was the largest spending commitment in 37 states, including Rhode Island. Nationally, unfunded pension costs were equivalent to 6.9 percent of 50-state personal income in 2013, the highest level in a decade, Pew said.

“Although states have decades to pay off these sums — or, in the case of retiree health care, make changes that reduce their liabilities — these claims on future revenue can limit states’ budget flexibility when the costs come due. Less money may be available to fund other priorities or to cover unexpected needs. As part of a state’s full financial picture, these liabilities also can affect credit ratings and borrowing costs,” Pew wrote.

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