(The Center Square) – A think tank praised North Dakota’s financial position but noted the state retirement system had negative returns in 2022.
Truth in Accounting’s 14th annual report ranks the financial health of all 50 states by determining if the bills can be paid or if the states are in a deficit based on figures from fiscal year 2022.
Twenty-two states have a “taxpayer surplus,” defined as “the amount of money left over after all of a state’s bills are paid, divided by the estimated number of taxpayers in the state.”
North Dakota’s taxpayer surplus is $47,400. The state has $23.4 billion in assets to cover its $10.5 billion in bills, a $12.8 billion surplus, according to the report. The state earned an “A” from the group and ranks second among the 50 states.
Like other states, North Dakota received an influx of cash during the COVID-19 pandemic, which helped to pay down some state debt. Consumers also spent and traveled more, the report said.
“Even though North Dakota was in good fiscal health at the end of its 2022 fiscal year, uncertainty surrounding the full economic recovery post-COVID makes it impossible to determine how much will be needed to maintain government services and benefits in the coming years,” the report said. “With such uncertainty, it is good that the state retains funds available to pay bills.”
The state’s retirement system also took a hit in 2022, according to Truth in Accounting. Investments yielded a 20% return in 2021 but had 5% negative returns in 2022.
Pension and retiree health care benefits put a strain on states, according to the report, done in partnership with the University of Denver’s School of Accountancy.
The overall average debt among the 50 states dropped to $938.6 billion in 2022 from $1.2 trillion at the end of fiscal year 2021, the organization said.
“We are happy to see state debt decreasing but states should not count on temporary federal funding and increased tax collections to fix their long-term problems,” says Sheila Weinberg, founder and CEO of Truth in Accounting. “Elected officials need to include the true costs of government in their budget calculations, including accruing retirement benefits so that they can make real progress towards a healthier financial future.”