Report: CT has highest taxpayer debt in country; NY not far behind
A new report says that Connecticut has the highest taxpayer debt of any state in the nation.
According to Truth in Accounting”™s annual Financial State of the States 2021 analysis, Connecticut would need $62,500 from each of its taxpayers to pay all of its bills, placing it below #49, New Jersey, which would need $58,300 per taxpayer to pay off its debt.
New York was 41st, with a $20,100 per taxpayer burden. All states from New York through Connecticut ”“ including Massachusetts and California — received a financial grade of “F.”
To arrive at the rankings, TIA examined each state”™s fiscal year 2020 annual comprehensive financial reports, which for most states, including Connecticut, runs through June 30. (New York”™s runs through March 31.)
It then divides the amount of money needed to pay bills by the number of state taxpayers to come up with the taxpayer burden figure. 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 number.
At the end of their FY 2020, 39 states did not have enough money to pay their bills, according to the report. “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,” the TIA wrote.
“Connecticut”™s elected officials have repeatedly made financial decisions that left the state with a debt burden of $79.6 billion,” it stated. “Connecticut”™s overall financial condition worsened by 18% during the pandemic mostly because pension plan liabilities increased faster than investment income, which catapulted the state to last place.”
Going unnoted was Connecticut”™s two consecutive years of paying down its pension liabilities. Late last month, Treasurer Shawn Wooden announced that the state will pay $1.623 billion into both the State Employees”™ Retirement Fund (SERF) and the Connecticut Teachers”™ Retirement Fund (TRF).
“This report is another indictment of the Connecticut Democrats’ inability to manage state finances and protect taxpayers,” said Senate Republican Leader Kevin Kelly (R-Stratford). “Our state is at the top and bottom of the wrong lists. Connecticut is dead last in the nation in job growth, last in income growth, and last in recovery from the Covid recession. Yet we are number one for taxpayer burdens.
“We need change, we need balance, we need government to look out for working- and middle-class families to move our state forward,” Kelly added.
Meanwhile, New York”™s debt burden of $132.7 billion also “stem(s) mostly from unfunded
retirement obligations that accumulated over the years,” the report said. “The state had only set aside 84 cents for every dollar of promised pension benefits and 2 cents for every dollar of promised retiree health care benefits.”
“New York”™s overall financial condition worsened by nearly $15 billion since the previous fiscal year mostly because of an $11 billion investment loss in the New York State and Local Employees”™ Retirement Plan,” it added.
On the opposite end of the spectrum was Alaska, which had the highest taxpayer surplus — $55,100 ”“ and received an “A.” North Dakota and Wyoming were the only other states to receive such a grade.
Truth in Accounting is a 501(c)(3) nonprofit organization “committed to educating and
empowering citizens with understandable, reliable and transparent government financial
information.”