The State Budget Solutions Project has just released a comprehensive (and painful) assessment of state-level debts. The totals include reported debts plus future liabilities and Unemployment Insurance loans. SBS then ranks each state’s debt per capita, per private sector worker, and as a percentage of private sector economic output.
Even the leader in all three categories, Nebraska, owes almost $10,000 per private sector employee, and those at the bottom of the pack make one cringe. Alaska, for example—the state one might assume to be overflowing with natural resource revenues—owes more than $100,000 per private sector employee.
Total State Debt per Private Sector Worker Rankings
|Best 5 States||Worst 5 States|
|Nebraska ($9,787)||Alaska ($102,389)|
|Tennessee ($15,861)||New Jersey ($85,615)|
|Indiana ($16,208)||Hawaii ($77,371)|
|South Dakota ($19,272)||Connecticut ($71,960)|
|North Dakota ($19,403)||New Mexico ($61,387)|
While North Carolina does not appear in the best or worst five of any of the categories, SBS calculates the state’s debt to be nearly $100 billion—13th highest in the nation (or 38th best, as presented by SBS). That is despite the state’s balanced budget amendment, and per private employee it comes to just over $30,000—20th best in the nation. Similarly, with debt at 27 percent of private economic output, North Carolina places 15th best in the nation.
Given the known debts at the federal level, the scale of these state debts relative to the tax base has become so great that a default of some sort appears imminent. For more on why that may be the case, here is an overview of a report, “The States in Crisis,” from John Hood, president of the John Locke Foundation. Additionally, here is an insightful interview I conducted with Hood on this topic while I was working as a reporter in Louisiana—28 minutes (MP3).