(The Center Square) – Louisiana’s financial condition improved in 2024, but the state still does not have enough money to pay all of its bills, according to a new analysis from the fiscal watchdog group Truth in Accounting.
In its Financial State of the States 2025 report, the group found that Louisiana had $32.3 billion available to pay $48.6 billion in outstanding bills, leaving a $16.3 billion shortfall. To close that gap, each taxpayer would need to contribute $13,000. The state earned a “D” grade for its fiscal health and ranked 44th out of 50 states.
The $16.3 billion shortfall represents an improvement from the previous year, when Louisiana needed $18.9 billion to pay its bills and taxpayers carried a slightly higher burden of $13,400 each.
Truth in Accounting attributed the improvement to revenues that exceeded expenses and a $1.3 billion reduction in net pension liability that was driven by strong market performance. The report noted that Louisiana contributed nearly 34 percent of employee salaries to its retirement system, a figure that underscores the high cost of meeting pension obligations.
The report also pointed to Louisiana’s reliance on temporary federal support. Since 2020, the state has received substantial aid in response to the COVID-19 crisis and various natural disasters, which helped improve its financial standing and increased available resources to cover expenses.
That aid is now beginning to decline, and the report warned that if federal grants return to 2019 levels, adjusted for inflation, Louisiana could lose about $8.4 billion. That amount represents roughly 18 percent of the state’s projected expenses and could present significant challenges to maintaining services and balancing future budgets.
Truth in Accounting said the state’s obligations include bonded debt, unfunded pension benefits and retiree health care liabilities, as well as other liabilities not tied to capital assets. After subtracting debt related to capital projects, the state’s total bills still amounted to $48.6 billion.
The group assigns a “D” grade to governments with a taxpayer burden between $5,000 and $20,000.
