Overview

• The Financial State of the States 2025 report for fiscal year 2024 concludes 25 states lack enough resources to meet all obligations, noting that typical budgeting often omits long-term costs.
• Across the states, Truth in Accounting tallied $2.2 trillion in assets against $2.9 trillion in debts, including $832 billion in unfunded pension liabilities as the largest component.
• The report identifies New Jersey, Connecticut, Illinois, Massachusetts, and California as the deepest sinkholes, while North Dakota, Alaska, Wyoming, Utah, and Tennessee post the strongest surpluses.
• Louisiana has a $16.3 billion shortfall—about $13,000 per taxpayer—earning a D grade and ranking 44th, with improvement attributed to revenues outpacing expenses and market-driven pension gains, but with a warning that waning federal aid could reduce funding by about $8.4 billion or roughly 18% of expenses.
• Alabama reports an $11.6 billion gap, equal to an $8,000 burden per taxpayer, earning a D grade and ranking 34th, and could forfeit about $2.9 billion in federal support if grants return to 2019 levels adjusted for inflation.