Nine State Governments Earn F Grades for Dismal Financial Health

CHICAGO — Truth in Accounting (TIA), a think tank that analyzes government financial reporting, found that nine state governments currently have a Taxpayer Burden™ in excess of $20,000. Taxpayer Burden is a calculation of the state’s bills divided by the number of taxpayers. Each of the nine states earned an F grade using TIA’s methodology of assessing governments’ financial conditions. These findings are released today in the annual Financial State of the States report, which ranks all 50 states by their financial health. The F grade states include the following:

  • New York | Taxpayer Burden: $20,500

  • California | Taxpayer Burden: $21,800

  • Kentucky | Taxpayer Burden: $25,700

  • Delaware | Taxpayer Burden: $27,100

  • Hawaii | Taxpayer Burden: $31,200

  • Massachusetts | Taxpayer Burden: $31,200

  • Connecticut | Taxpayer Burden: $51,800

  • Illinois | Taxpayer Burden: $52,600

  • New Jersey | Taxpayer Burden: $65,100

There are several ways for states to accumulate sizable Taxpayer Burdens and earn F grades according to the Financial State of the States methodology. Many state governments struggle to close budget gaps resulting from benefit programs that have been promised to public employees but not fully funded. These unfunded retirement and healthcare obligations represent real expenses that fall on taxpayers. Still, politicians often find it expedient in the short term to kick the can down the road to future generations thereby forfeiting their fiduciary responsibilities.

“Many of these state governments have no hope of achieving a budget recovery barring significant program cuts or tax hikes,” says Sheila Weinberg, Founder and CEO of TIA. “This crisis has been years in the making and demands political courage on the part of voters and elected officials to return to the path of sustainability.”

This year’s Financial State of the States report found additional causes for concern across the country, with 40 state governments finding themselves in varying degrees of debt. The average Taxpayer Burden across all 50 states is $8,450.

This new data comes as a part of Truth in Accounting’s 2019 Financial State of the States (FSOS) report. Truth in Accounting first launched the FSOS in 2009 as a first of its kind effort to determine the true financial condition of every state government. The watchdog organization has now published ten years of consistent data offering a wealth of information for taxpayers and citizens. Last year was the first year state governments reported all retirement liabilities, but Truth in Accounting has been including this information in their analysis for the last ten years. You can view this year’s full report here, and find more in depth, state-by-state data here.

Founded in 2002, Truth in Accounting is dedicated to educating and empowering citizens with understandable, reliable, and transparent government financial information. Sheila Weinberg is a Certified Public Accountant with more than 30 years of experience in the field.