(The Center Square) – Tennessee is among the states with the lowest amount of state and local government debt in the nation, according to a new study.
Tennessee is the best on the Reason Foundation’s ranking of per capita state government debt at $1,952. Government debts in Connecticut and New Jersey equate to $26,187 and $22,968 per resident, respectively, the two highest in the country.
In total debt, Tennessee’s $13.49 billion is lower than 31 other states.
“State and local government debt includes both short- and long-term obligations – from salaries due at the end of this month to bonds maturing decades from now,” the Reason Foundation said. “The $6.1 trillion in liabilities includes $1.5 trillion in public pension obligations, and $958 billion for retiree health care obligations.”
With 7.3 million people, Tennessee is the 15th most populous state in the nation. It has no state income tax.
Earlier this month S&P confirmed Tennessee’s AAA rating for general obligation bonds, the best ranking available.
“Tennessee is leading the nation because of our longstanding bipartisan commitment to responsible fiscal management,” Gov. Bill Lee said in his budget proposal to the Legislature last February.
The state has invested in economic opportunities, reduced debt and increased cash reserves, the governor said.
The state has more than $2 billion in a “rainy day” fund for financial emergencies or economic downturns.
Tennessee is only one of nine U.S. states with no state income tax. The others are Florida, Texas, Washington, Alaska, Nevada, Wyoming, South Dakota and New Hampshire.
Tennessee’s state sales tax is 7%, which is in addition to some local government sales taxes.
