States Real Debt Burden is $4 Trillion
September 04, 2012
With the record debt President Obama managed to rack up in four years, we are becoming desensitized to the word: trillion. This is pretty unfortunate, along with the latest State Debt report. We’re not just $16 trillion in national debt, we’re $4 trillion in state debt.
“America’s 50 states are collectively over $4 trillion in debt according to a new study by an independent, non-partisan think tank.
State Budget Solutions‘ third annual State Debt Report shows that aggregate state debt fell from $4.24 trillion last year to $4.19 trillion this year. State Budget Solutions’ debt calculations include a state’s regular debt, the fiscal year 2013 budget gap, outstanding unemployment trust fund loans, unfunded other post employment benefit liabilities, and the state’s unfunded pension liabilities.
California, again, led all states in total debt weighing in at $617 billion in unfunded liabilities. On a per capita basis, each Californian faces $16,386 in state debt compared to just $11,117 owed by each Texan. The top five states in total debt burden where California, New York ($300 billion), Texas ($286 billion), New Jersey ($282 billion), and New Jersey ($271 billion). The same five states led the ranking last year.
Unfunded public pension liabilities are the main drivers of state fiscal woes, accounting for $2.8 trillion of the shortfall. Other post employment benefits, including health care, account for another $627 billion in debt. California faces $398 billion in unfunded pension liabilities and alone.”
Leaders like NJ Governor Chris Christie and VP Nominee Paul Ryan have been saying this for years: We must address the third rail of politics in order to avoid this fiscal cliff we’re about to go off of. We must elect leaders who are willing to stand up to the teacher’s and public sector unions so that we can reform these unfunded liabilities. Otherwise, it’s off the cliff we go.
Correction: In the Washington Examiner article we posted, New Jersey is listed twice. According to the State Budget Solutions Annual State Debt Report, New Jesery is #5 with a debt of $258 billion and Illinois is #4 at $271 billion. Thanks to DJ Raven for pointing this out to us.
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