(The Center Square) — In a report that scored states on their financial condition, Alabama taxpayers would owe $7,000 each if individually paying off the state’s debts.
The state, ranked No. 32 and given a D grade by Truth in Accounting, owes $5.9 billion. The taxpayer burden is between $5,000 and $20,000.
Truth in Accounting says the state has $17.2 billion in assets and cash on hand to pay $27 billion in bills. Those liabilities include $11.3 billion in bond debt, $10.7 billion in unfunded pensions and $2.75 billion in unfunded health care costs for state and local retirees.
Only Mississippi (33rd place, D grade, taxpayer burden of $7,900) was worse than Alabama among its neighbors.
As with many states, Alabama’s pension system is struggling after investment returns in 2022 were down compared to the year before. The three funds’ investments lost an average of 13.67%.
A report by the Equable Institute released in May said that three pension systems – Alabama, Mississippi and South Carolina – need reforms to avoid taxpayer bailouts or riskier investments. The report said the Retirement System of Alabama, which is the state’s defined benefit pension fund, had a funding ratio of 61.7% and an unfunded liability representing 8.88% of the state’s gross domestic product.
Nationally, the five worst states were Hawaii ($23,100 individual taxpayer burden), Massachusetts ($26,700 individual taxpayer burden), Illinois ($41,600 individual taxpayer burden), Connecticut ($50,700 individual taxpayer burden) and New Jersey ($53,600 individual taxpayer burden).
The five best were Alaska ($80,000 taxpayer surplus), North Dakota ($47,400 taxpayer surplus), Wyoming ($24,600 taxpayer surplus), Utah ($12,700 taxpayer surplus) and Tennessee ($9,500 taxpayer surplus).
