More than 30 US states don’t have enough cash to pay their bills

Thirty-one states, or over two-thirds of US states, don’t have enough cash to pay their bills. For the thirteenth year in a row, the impartial accounting watchdog Truth in Accounting (TIA) released its Government Financial Health report on Tuesday, detailing the weak fiscal health of many countries.

To balance the budget as required by law in 49 states, “elected officials have not included the true cost of government in their budget calculations and have passed the cost on to future taxpayers,” according to TIA’s methodology.

TIA divides the amount of funds required to pay bills by the number of state taxpayers to generate what is known as the taxpayer burden. TIA’s analysis is based on the latest available government finance data; For most states, fiscal year (FY) 2021 ran from June 1, 2020 to June 30, 2021.

At the end of fiscal 2021, all states had a total debt of $1.2 trillion, up 26% from fiscal 2020. This news is worrying, especially in an environment of rising inflation and an environment where some economic indicators are threatening us bring close, or even in a recession. The borrowing costs of the most indebted countries will rise, making it even more difficult to solve their fiscal challenges. If unemployment starts to rise, it will exacerbate states’ fiscal challenges.

The fact that thirty-one states are now unable to pay their bills is an improvement from 2018, when forty states were unable to pay their bills; By 2021, the number had improved to thirty-nine states. When I asked Sheila Weinberg, CEO of TIA, what was responsible for an apparent improvement in government finances, she said that “temporary record gains in stock markets during this time and the Covid relief money. Governors are claiming surpluses while their financial reports and pension plan numbers suggest their state is heavily indebted. Governors only look short-term while taxpayers worry about the future.”