(The Center Square) – Alabama does not have enough money to pay its outstanding bills and earned a D grade in the 16th annual Financial State of the States 2025 report.
Released by Truth In Accounting, the analysis for fiscal year 2024 – ending June 30, 2024 – said any state with a taxpayer burden between $5,000 and $20,000 gets a D. The report says $21.9 billion is available to pay $33.4 billion worth of bills, generating an $11.6 billion shortfall or $8,000 per taxpayer in the nation’s 24th largest state.
The report says, “Alabama may lose $2.9 billion in federal funding (8% of expenses) if allocations return to 2019 levels, adjusted only for inflation.”
Alabama is 34th nationally and one of 13 states earning a D. Five achieved an A (surplus greater than $10,000 per taxpayer); 20 earned a B (surplus between $1 and $9,999 per taxpayer); seven earned a C (burden between $0 and $4,999 per taxpayer); and five got an F (burden greater than $20,000 per taxpayer).
The bottom lines are reached by taking money needed to pay bills and dividing by the number of taxpayers. Truth In Accounting says, “Unfunded retirement liabilities were the largest contributing factor to state-level debt. One way states make their budgets look balanced when they are not is by shortchanging public pensions and other post-employment benefits funds.”
