Financial awareness, particularly in government, is an issue of great importance to me. I feel strongly that citizens should know exactly why and how their money is being spent. Honesty and accountability are two essential components of our government.
We hear reports about the skyrocketing federal deficit and states like California that are struggling to repair their state's damaged economy. But how do we fare in Kansas? According to the latest edition of State News, which is compiled by the Council of State Governments, the answer is not good.
Unlike the federal government, states are not technically allowed to run deficits. However, to get around this, states will issue certificates of indebtedness or bonds in order to fund their debt in an attempt to stay flush financially. It would be akin to you taking out a loan to pay down a large amount of personal debt. The problem is that bonds are just a temporary solution that can end up costing substantially more money in the long run.
According to Moody's Investor Services, "2004 State Debt Medians," the state's debt looms at a substantial $2.6 billion, but well below the debt-ridden California's $37 billion. However, when that debt is calculated on a per capita basis, each Kansan would have to pay $963 to pay off our state's debt making us the 17th worst state in the nation-barely better than California at $1,060 per person or 15th worst in the nation.
Compare with that of Nebraska, the state with the least debt in the country, and the difference is startling. In contrast, each resident of Nebraska would only have to pay a mere $43 to rid their state of the debt they face. In fact, we are the most indebted state per capita in our region, with our neighboring states maintaining significantly lower debt.
The trend of bonding debt and then shifting it to future generations is extremely concerning and will take our children years to recover.
Fiscal responsibility should be a top priority of our state and it is concerning to see our indebtedness level at such a high level. As we face budget difficulties in the upcoming years, hopefully we will proceed cautiously with how to deal with state finances and the potential problems that could arise from increasing bond debt payments.
What can you do about the debt problem? It is as simple as getting involved and expressing your concerns to those individuals that are in a position to improve the fiscal health of Kansas. It's your state, your money and your children's future. As always, if I can do anything for you please let me know. It is a pleasure serving as your State Treasurer.
Click here to view a PDF containing Kansas debt graphs
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