Thursday, September 24, 2020

Too many US states are balanced on a fiscal knife-edge

A few days ago, I pointed out that the economic threat to America was far more important than whether a new SCOTUS judge was to be appointed.  That applies as much to the fifty states making up our union as it does to the nation as a whole.

The latest annual "State of the States" survey bears this out.

At the end of the fiscal year (FY) 2019, 39 states did not have enough money to pay all of their bills. This means that to balance the budget—as is required by law in 49 states—elected officials have not included the true costs of the government in their budget calculations and have pushed costs onto future taxpayers. TIA divides the amount of money needed to pay bills by the number of state taxpayers to come up with the Taxpayer Burden™. If a state has money available after all bills are considered, that surplus amount is likewise divided by the number of taxpayers to come up with the Taxpayer Surplus™. We then rank the states based on these calculations.

We have also implemented a grading system to give greater context to each state’s Taxpayer Burden or Taxpayer Surplus. Based on our grading methodology, three states received A’s, eight received B’s, 14 received C’s, 17 received D’s, and eight states received failing grades.

States in general do not have enough money to pay all of their bills. The total debt of the 50 states amounts to $1.4 trillion. Our analysis does not include debt related to capital assets. Most of this debt comes from unfunded retirement benefit promises, such as pension and retiree healthcare liabilities. This year, pension debt accounts for $855 billion, and other post-employment benefits (OPEB) totaled $617 billion. Furthermore, we have estimated that the 50 states could lose $397 billion in revenue as a result of the coronavirus pandemic.

. . .

States that lack the necessary funds to pay their bills are called Sinkhole States, while those that do have enough money are referred to as Sunshine States.

Top 5 Sunshine States (taxpayer surplus):
1. Alaska: $77,400
2. North Dakota: $37,700
3. Wyoming: $19,600
4. Utah: $5,500
5. Tennessee: $3,400

Bottom 5 Sinkhole States (taxpayer burden):
50. New Jersey: -$57,900
49. Illinois: -$52,000
48. Connecticut: -$50,700
47. Hawaii: -$31,700
46. Massachusetts: -$30,100

There's much more at the link.

I suggest you click over to the full report and take a look at where your state stands in the financial rankings.  I was unpleasantly surprised to note that Texas is in the lower half of the "pack", among the "Sinkhole States" (34th out of 50, with a D grading, although it's nowhere near as "broke" as some).



The Lab Manager said...

As a native Texan, you think we could do better than we do.

A big part of this issue though is Federal Reserve which will destroy all the country with it's asinine monetary policies. Since states can't make money out of thin air like the Feds, were stuck with them unless some states start some other monetary systems that are hopefully more solvent.

dangerdog said...

I guess default or debt forgiveness are in the future

Witold Pilecki said...

The coming fiscal nuclear disaster in Kommiecticut is not even on anyone's radar.... just COVID-19 7/24/265, but it is certainly on mine. I have been trying unsuccessfully to get my wife to pull up stakes and GTFO, but she is reactive, not proactive. It will take her losing her job and friends that are leaving and going to leave before she will commit to selling the house and resettling down south, unless I just leave her. Of course by then, it will be too late.

Will said...

NJ funds their towns and cities from revenue sharing of State Police traffic tickets. I doubt there was much traffic this year, so a double whammy, loss of summer vacation visits and the resulting tickets, all due from the fake pandemic pushed by the Dems/deep state.

Nice state, if you could do away with their bad politics. Then again, that covers a lot of our states...

Steve S said...

Look for a lot of sinking in the ratings in FY2020. Even in TN government is squeaking about the revenue losses due to their shooting themselves, er shutting down the economy.

Chris said...

Interesting. Here in Oregon the government - particularly Gov. Brown - is constantly shrieking about how they need more money to cover existing bills (and have been for years), but that report shows us with a surplus (9th best in the nation).

Sam L. said...

The BLM/antifa riots aren't doing them and good. But that seems to be what they want. I trust Mr. Trump will, if those fools ask for money to rebuild what's been burned and/or sacked, will say NO, huh uh, and ne'er, not gonna happen! You didn't attempt, or even consider, doing something to stop this.