September 4 2012
Vicki E. Alger
State Budget Solutions has just released its third annual report on state debt. Aggregate state debt now totals more than $4 trillion. To put that amount in perspective, here’s a great visual of what just (!) $1 trillion looks like. Now for SBS’ top debtors:
California again trumped other states with a $617 billion debt. California's debt is more than twice the size of New York's state debt, and New York has the second largest total debt burden in the nation. Texas, Illinois, and New Jersey rounded out the top five states with the most debt. Although New York and Texas moved up one and two spots, respectively, the states with the five largest debts remained unchanged from last year's report.
Vermont has the least amount of debt of all fifty states with a $5.8 billion state debt. North Dakota, South Dakota, Wyoming, and Nebraska follow Vermont with the smallest debt burdens in the country.
The leading cause of all that debt, accounting for almost $3 trillion, is unfunded pension liabilities. Compared to last year, SBS found:
Overall, total state debt fell slightly when compared to last year's report, from $4.24 trillion to $4.17 trillion. The decrease is attributable to reductions in unemployment trust fund loans and fiscal year budget gap totals. Fiscal year budget gaps alone fell by more than half. The lack of a subsequent, sizable drop in total state debt, however, shows that the cause of state debt is a systemic one requiring far more than annual budget balancing to eliminate.