Our current County Mayor has stiffed the County retirement fund $20,000,000 each of the last three years.
statebudgetsolutions.org
Analysis of total state debt shows Alaska, New Jersey, and Hawaii among states in worst fiscal situations
State Budget Solutions | by Andrew Guevara | November 17, 2011
State Budget Solutions' (SBS) latest study reveals total state debt averages $13,754 for every American and $38,721 for each of the private sector workers in this country. The research examines how total state debt is affected by state size factors, including population, private sector labor force, and private sector output. The resulting figures tell more about how states are doing fiscally compared to one another than raw debt estimates alone.
How the states compare
This study looks at state debt as more than just a lump sum number. Aggregate state debt numbers are a coarse measure of a state's true fiscal burden because they fail to consider each state's size. Viewed relative to state-specific population, private sector workforce, and private industry output in current dollars, state debt numbers reveal the actual fiscal burden on each person, on private industry workers and the state's private sector production. This study explains exactly how much this burden is. Several states make multiple appearances at the bottom of the three categories in this study, meaning they rank worst. These states include: Alaska, New Jersey, Hawaii, Connecticut, New Mexico, and Illinois. Alaska ranks worst in two categories: total state debt per capita at $39,373 per person and total state debt per private sector worker at $102,389 per private worker.
This paints a different picture than when absolute debt is considered only. The three states that possess the largest state debts, compiled in this year's annual state deficit report, California, New York, and Texas, have the largest populations, number of private sector workers, and private sector outputs, but none break the bottom rankings in any category in this report.
Nebraska, Tennessee, Indiana, and South Dakota frequently make the top of these new rankings. Nebraska maintains the number one position in all three categories.
New Jersey and Illinois are the only states that rank near the bottom for both absolute total state debt and the lists in this report. However, New Jersey makes an appearance at the bottom in all categories, while Illinois only appears once. Illinois ranks fourth largest among the states in two size categories - population and private sector outputs.
Methodology
Total state debt as calculated by SBS includes outstanding debt as well as future liabilities, including pension and other post-employment benefits liabilities, Unemployment Trust Fund loans, and current projected budget gaps. Total state debt is broken down per person to show the burden of debt on each person in a state.
Moreover, total debt is divided by the number of private sector workers in each state. This value takes the labor force into account and gauges the amount of debt each non-public sector worker carries. Each private worker carries the weight of paying back the state's outstanding debt obligations and all liabilities, including pension and health benefits promised to public sector workers. Undoubtedly, this leads to financial strains on private workers from heavier taxes and private employers who have to manage higher associated costs to run their businesses.
Economic activity in each state is also considered in this report. Total debt is taken as a percentage of each state's gross state product for private industries. The larger a state's portion of debt is to its private sector output signifies more resources necessary to pay off public debt in the future than to add to future economic growth.
The numbers
SBS ranked states in three distinct categories: total state debt per capita, total state debt per private sector worker, and total state debt as a percentage of gross state product (GSP) for private industries.
Alaska finished with the highest total debt per capita and per private sector worker with $39,373 per person and $102,389 per private worker. Finally, Hawaii's debt is 71.39 percent of its total private output, putting it last in the total debt as a percentage of GSP for private industries category.
Nebraska ranked best in all three categories: $4,274 per person in total debt per capita, $9,787 per worker in total debt per private sector worker, and only 10.05 percent of its debt is its total state output.
The bottom five states in the total debt as a percentage of GSP for private industries category were the only states to break the 50 percent margin.
Sources
Total state debt figure are found in SBS' 2011 annual state deficit report. The state debt number combines states' major debt and future liabilities, including pension and other post-employment benefits liabilities, Unemployment Trust Fund loans, and current projected budget gaps. Outstanding debt sources are from each state's most recent Comprehensive Annual Financial Report (CAFR), which can lag current data by one to three years. Unfunded pension liability numbers are from AEI's "The Market Value of Public-Sector Pension Deficits" and post-employment opportunities figures are from Pew's "The Widening Gap: The Great Recession's Impact on State Pension and Retiree Health Care Costs" report on pension funds as of 2009. Unemployment Trust Fund Loans are from the National Council of State Legislators, and current budget shortfalls are from the Center on Budget and Policy Priorities.
Population figures are taken from the 2010 U.S. Census Population figures, and private sector worker numbers are from the most recent figures from the Bureau of Labor Statistics. Gross state products for each state are from 2010 figures from the Bureau of Economic Analysis.
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