Maryland may have a requirement for a balanced budget, but its audited financial statements show that it spent more than it took in from fiscal 2008 to 2012, according to the Institute for Truth in Accounting.
“They circumvent the balanced budget requirements” with accounting gimmicks, said Sheila Weinberg, founder and CEO of the Institute for Truth in Accounting. This watchdog group has long maintained that states do not accurately represent their expenses, revenues, assets and liabilities. The Comprehensive Annual Financial Reports require all states to follow the same accounting rules.
The institute calculates ‘Net Revenue’ as all income vs. all expenses, commonly reported by businesses but not governments.
The institute reported: “Thirteen states spent more than they collected in 2012: New Jersey, Illinois, New York, Massachusetts, Louisiana, Kentucky, West Virginia, Maryland, Connecticut, Pennsylvania, Hawaii, California and Delaware. This means they either had to borrow money to pay bills, or rack up more debt for future taxpayers.”
In fiscal 2009, in the depths of the Great Recession, almost all states spent more than they took in, but according to the institute’s calculations that has happened every year in Maryland since 2008, as shown in the chart to the right.
The chart was generated from the Institute’s State Data Lab, which allows anyone to create their own charts and graphs for over 150 different sets of data. It also allows you to compare this data by states.
Five of the states in the red, including Massachusetts, Kentucky, West Virginia, Delaware, and Pennsylvania, actually had positive net revenue in 2011, the institute said (See Chart Here).