With just $14.8 billion available to pay $36.4 billion worth of bills, Louisiana is among 39 states that saw a budget shortfall at the end of fiscal year 2019 and was ranked 40th overall in terms of its fiscal health, making it ill-prepared for the current economic crisis.
That’s according to the 11th annual Financial State of the States report published today by nonpartisan think tank Truth in Accounting, which reviewed all 50 states’ finances, with the exception of California, which has not yet released its fiscal report.
In Louisiana, Truth in Accounting found that elected officials have made repeated financial decisions that left the state with a tax burden of $21.6 billion, which equates to a burden of $17,100 for each state taxpayer, earning the state a “D” grade.
Louisiana’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years. Of the $37.9 billion in retirement benefits promised, the state did not fund $9.8 billion in pension and $9.6 billion in retiree health care benefits.
The state is projected to lose $7 billion in revenue as a result of this crisis, according to rough estimates by Truth in Accounting. While the uncertainty surrounding the pandemic makes it impossible to determine how much will be needed to maintain government services and benefits, Louisiana’s overall debt will most likely increase.
All 50 states reported a combined $1.4 trillion worth of debt and are projected to lose a combined $397 billion in revenue, according to the report.
Ten states entered 2020 with surpluses, including Alaska ($77,400 per taxpayer), North Dakota ($37,700), Wyoming ($19,600), Utah ($5,500) and Tennessee ($3,400), followed by South Dakota, Nebraska, Idaho, Oregon and Iowa.
New Jersey ranked the worst, having the highest taxpayer burden of $57,900 per taxpayer. Illinois was not far behind, reporting a $52,000 taxpayer burden, followed by Connecticut ($50,700), Hawaii ($31,700) and Massachusetts ($30,100). Read the full report.
