Ouch! Total State Debt Tops $4 Trillion Dollars, California Ranked the Worst
posted at 8:39 am on September 3, 2012 by Matt Vespa
In a year of fiscal instability, the report concerning the debt taken on by all fifty states doesn’t provide a better picture. In fact, “for the third consecutive year, State Budget Solutions examined state debt and calculated the total amount of debt that each state faces. This year’s report shows that aggregate debt across the 50 states amounted to $4.17 trillion.” Cory Eucalitto of State Budget Solutions wrote on August 28 that:
California again trumped other states with a $617 billion debt. California’s debt is more than twice the size of New York‘s state debt, and New York has the second largest total debt burden in the nation. Texas, Illinois, and New Jersey rounded out the top five states with the most debt. Although New York and Texas moved up one and two spots, respectively, the states with the five largest debts remained unchanged from last year’s report.
Vermont has the least amount of debt of all fifty states with a $5.8 billion state debt. North Dakota, South Dakota, Wyoming, and Nebraska follow Vermont with the smallest debt burdens in the country.
My sympathies go out to every resident in California. Governor Brown has added an additional $7 billion dollars to the state deficit. California currently faces a $16 billion dollar deficit, which is why a new tax increase measure will be on the ballot this November. “Brownie, you’re doing a heck of a job.”
While Eucalitto wrote that the total state debt dropped from $4.24 to $4.17 trillion, he notes that the unfunded liabilities within the state pension and entitlement programs make up half ($2.8 trillion) of all the accumulated debt. We conservatives know this issue, but it always falls on deaf ears with those on the left. When liberals pitch their “reforms,” it’s either laughable or so weak as to not damage the Democrats’ cozy and parasitic relationship with big labor.
However, Eucalitto reported that the 2011 market value pension liabilities haven’t been released– so SBS is using 2010 figures.
Unfunded liability figures from the Pew Center on the States rely on much of the same data that states use to continually underfund their pension systems. While market-valued liabilities total $2.8 trillion, the latest traditionally calculated figures total only $760 billion in unfunded pension liabilities. Total state debt using these figures is still over $2 trillion, but a comprehensive view of state debt without accurately assessed public pension liabilities disguises the problem to the tune of as much as $2.1 trillion.
States and other sources have not yet released market value pension liability figures for fiscal year 2011. Therefore, this year’s report uses the same market-valued pension liability figures first published in 2010 and used in the previous year’s report. Even so, growth in traditionally calculated unfunded pension liability totals indicates that were updated numbers available, aggregate state debt would have continued to increase.
Other areas that contributed to this mess were health benefits, leases,unemployment trust loans, state bonds, annual shortfalls, and other “post employment” benefits owed to public sector employees. It’s destroying the fiscal health of our states. Yet, Barack Obama wants to impose the largest tax increase in history when Obamacare is fully implemented. That’s on top of the tax hikes he wants for the job creating and investing class, which will do nothing for job creation.
Welcome to Obamanomics 101. Furthermore,Democrats want no changes to our current entitlement system, which will soon destroy our financial future altogether. Furthermore, California and New Jersey have proven that tax hikes solve nothing in curbing deficits, debt, and creating jobs.
The only good indicator is that in states where Republican governors were elected in 2010–their unemployment numbers dropped cumulatively at a rate faster than the national average. Furthermore, our policies have proven to have brought back the economic vigor this country has desperately tried to resurrect with no help from the crushing, regulatory boot of the Obama administration.
Gov. Scott Walker of Wisconsin took a $3.6 billion dollar budget deficit and turned that into a $154 million dollar surplus. Gov. Chris Christie signed a bipartisan pension reform bill that will save the state of New Jersey $122 billion dollars over the next thirty years.
For liberals who think conservatives aren’t serious about fiscal reform and responsibility–are either willfully ignorant or stupendously stupid. It’s time to get our debt under control. Hopefully, a Republican wave will bring in more conservative governorships and a Romney presidency where we can work in tandem to curb our fiscal crisis on all levels.