In the recently released 14th annual Financial State of the States report by Truth in Accounting, an analysis of the fiscal health of all 50 states reveals intriguing insights into their financial standing for fiscal year 2022.
Revenue Challenges
The report highlights that 28 states faced revenue challenges, struggling to meet their financial obligations in the fiscal year under review.
New Jersey’s Struggle
New Jersey took the unfortunate lead as the state with the worst fiscal health and the highest taxpayer burden.
Notable Runners-Up
Connecticut, Illinois, Massachusetts, Hawaii, Kentucky, Delaware, Louisiana, California, and Vermont are among the bottom ten states for fiscal health.
Surpluses Amidst Challenges
Contrastingly, 22 states reported surpluses, with the majority being led by Republican governors.
Alaska’s Fiscal Triumph
Alaska emerges as the state with the best fiscal health and the highest taxpayer surplus.
Top Ten Fiscal Performers
North Dakota, Wyoming, Utah, Tennessee, Nebraska, Idaho, Oregon, South Dakota, and Oklahoma join Alaska in the top ten states with the best fiscal health.
Decline in Total Debt
The report noted a decline in total debt obligations of all 50 states, attributing it to factors such as the end of lockdowns, increased tourism, individual spending, and federal pandemic funds.
Balanced Budget Requirement
Despite all states, except Vermont, having a balanced budget requirement, TIA argues that most states still struggle to pay all their bills.
Taxpayer Burden
New Jersey led with the highest taxpayer burden of $53,600 per taxpayer, closely followed by Connecticut and Illinois.
States in Debt
Twenty-eight states reported debts and taxpayer burdens, indicating a widespread fiscal challenge.
Minimal Taxpayer Burdens
On the flip side, states like Nevada, Missouri, Arizona, and Georgia showed minimal taxpayer burdens.
Taxpayer Surplus
Twenty-two states reported a Taxpayer Surplus™, reflecting the financial strength of these states.
Debt Sources
The report highlighted that most state debt stems from retirement plans, including pensions and retiree health care benefits.
Financial Health Recommendations
Sheila Weinberg, CEO of Truth in Accounting, urged elected officials to consider the actual costs of government in budget calculations, emphasizing the importance of accruing retirement benefits.
Collaboration with the University of Denver
The report was produced in collaboration with the University of Denver’s School of Accountancy, adding academic rigor to its findings.
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Featured Image Credit: Shutterstock / TippaPatt. The people shown in the images are for illustrative purposes only, not the actual people featured in the story.
