Report ranks every state’s debt, from California’s $497 billion to South Dakota’s $2 billion

State governments had $2.7 trillion in debt at the end of 2023, a new Reason Foundation analysis finds. This state debt is equivalent to approximately $8,000 per person nationally.

With $497 billion in liabilities, California had the largest state government debt as of the end of the 2023 fiscal year, the most recent year for which complete data are available.

Four other state governments had more than $200 billion in state debt: New York ($233 billion), Illinois ($223 billion), Texas ($217 billion), and New Jersey ($213 billion). Massachusetts had $120 billion in state liabilities, followed by Connecticut, Washington, Pennsylvania and Florida.

Meanwhile, 10 states—South Dakota, Idaho, Nebraska, Montana, New Hampshire, Utah, Vermont, Rhode Island, Wyoming, and Maine—each had less than $10 billion in debt at the end of 2023, according to Reason Foundation’s State and Local Government Finance Report.

On a per capita basis, Connecticut had the highest state debt, with $26,187 of debt per state resident at the end of 2023. With $22,968 in debt per resident, New Jersey was the only other state with more than $20,000 in liabilities per capita.

Reason Foundation finds 13 states—Connecticut, New Jersey, Hawaii, Delaware, Illinois, Massachusetts, Wyoming, Alaska, North Dakota, California, Washington, New York, and Vermont—had more than $10,000 in debt per resident.

Of other more populous states, Texas had $7,443 in per capita debt, Pennsylvania reported $5,872 per capita, and Florida had $3,334 in debt per capita.

The state governments with the lowest per capita debt at the end of 2023 were Tennessee, Utah, Nebraska, Idaho, South Dakota, Oklahoma, and Indiana, each with less than $3,000 in debt per resident.

Total state debt, reported as total liabilities, includes money state governments owe in the near term, such as unpaid bills and accrued payroll, as well as long-term obligations, including bonds, public pension benefits, and retiree health care benefits.

State governments’ long-term debt

Approximately 72% of state government debt is long-term, meaning it is due in more than one year. This long-term debt consists of bonds, loans, and notes (33%), unfunded public employee pension benefits (35%), unfunded public employee retiree health care benefits (22%), and accrued public employee leave payouts (2%).

State governments collectively reported $1.9 trillion in long-term debt, or approximately $5,800 per capita nationally, as of the end of 2023.

Reason Foundation found 29 states held at least $10 billion in long-term liabilities at the end of 2023.

Six of those states had more than $100 billion in long-term liabilities each: California ($299 billion in long-term debt), Illinois ($199 billion), New Jersey ($197 billion), Texas ($171 billion), New York ($154 billion), and Massachusetts ($104 billion).

Connecticut had the highest per capita long-term debt in the nation, at $23,934 per resident. New Jersey was just behind, with $21,197 in long-term debt per capita.

Hawaii, Illinois, Delaware, and Massachusetts were the other states with long-term debt exceeding $10,000 per capita at the end of 2023.

Of the larger states, New York ranked 12th in per capita long-term debt, with $7,615 per resident. California ranked 13th, with $7,552 per capita long-term debt. Texas was 16th, with $5,870 per capita. Florida ranked 37th in the nation in long-term liabilities, with $2,129 per capita.

Nebraska, Tennessee, Utah, and South Dakota were the only states reporting less than $1,000 per capita long-term debt at the end of 2023.

State public pension debt

Unfunded public employee pension liabilities occur when governments allocate fewer assets than necessary to fulfill the retirement benefits promised to public workers and retirees.

State governments collectively reported $664 billion in unfunded public pension obligations, equivalent to 35% of their long-term debt, or approximately $2,000 per capita nationally, as of the end of 2023.

As of the end of 2023, Illinois had the largest state pension debt, at $145 billion. It was the only state with more than $100 billion in state public pension debt.

California had the second-most state pension debt, $90 billion, which is primarily the state government’s portion of the larger unfunded liabilities held by the California Public Employees’ Retirement System and the California State Teachers’ Retirement System.

Five other state governments reported over $20 billion in pension debt: New Jersey ($80 billion), Texas ($55 billion), Massachusetts ($42 billion), Connecticut ($40 billion), and Kentucky ($29 billion)

On a per capita basis, Illinois again had the most pension debt, with $11,355 per resident. Connecticut was close behind with $11,192 per capita pension debt.

The remaining top 10 states with the highest per capita pension debt were New Jersey, Kentucky, Massachusetts, Alaska, Vermont, Hawaii, New Mexico, and Maryland.

In per capita pension debt, California ranks 14th, at $2,272 per resident; Texas ranks 16th, at $1,870; Florida ranks 41st, at $362; and New York ranks 49th, at $-157.

Three states did not have state pension debt at the end of 2023. Washington, New York, and South Dakota each reported more assets than projected liabilities across public pension systems.

Other post-employment benefits debt

Other post-employment benefits debt (OPEB), which are primarily public employee retiree health care benefits, are rarely pre-funded, making them a significant source of unfunded liabilities for governments. OPEB debt arises when governments promise health care or other post-employment benefits to workers but fail to set aside enough money in advance to cover the future costs.

State governments reported $421 billion in OPEB debt (22% of long-term liabilities), or about $1,300 per capita nationally, at the end of 2023.

Four states stand out with the most OPEB debt. California ($82 billion in OPEB debt), New Jersey ($75 billion), New York ($66 billion), and Texas ($53 billion).

Five other states had more than $10 billion in OPEB debt: Illinois ($20 billion), Pennsylvania ($17 billion), Connecticut ($17 billion), Massachusetts ($13 billion), and Maryland ($12 billion).

In per capita terms, New Jersey’s $8,067 of OPEB debt per resident was the highest. Delaware was close behind with $7,888 of OPED debt per capita.
The rest of the states with the most OPEB debt per capita at the end of 2023 were Connecticut ($4,687), New York ($3,289), Hawaii ($3,275), Vermont ($2,346), California ($2,069), Maryland ($1,921), Texas ($1,816), and Massachusetts ($1,805).

Alaska, Oregon, Utah, and South Dakota did not report any OPEB debt according to their 2023 financial reports.

State governments’ outstanding bonded debt

Bonds, loans, and notes represent the portion of a state government’s long-term liabilities that are explicitly borrowed in credit markets. Unlike public pension benefits or OPEB, which accumulate as estimated unfunded promises, these instruments are contractual debt obligations with fixed repayment schedules.

Nationally, state governments reported $630 billion in outstanding bonds, loans, and notes—33% of all state long-term liabilities, Reason Foundation finds. On a per capita basis, the state’s debt from bonds, loans, and notes equals about $1,900 per American.

California has the most outstanding bond debt, with $111.8 billion.

Texas has the second most bond debt, with $67 billion, followed by New York ($50 billion), Massachusetts ($46 billion), Illinois ($30 billion), Connecticut ($29 billion), Washington ($28 billion), New Jersey ($27 billion), Maryland ($22 billion), and Florida ($17 billion).

Two state governments, Indiana and Nebraska, reported zero outstanding bond debt at the end of 2023.

In per capita terms, the state governments of Hawaii and Connecticut rank first and second, respectively, with outstanding bonds of over $8,000 per resident.

Massachusetts, Delaware, and North Dakota follow, all with outstanding bond debt exceeding $4,000 per capita.

California ranked 10th, with $2,828 bond debt per resident. New York ranked 12th, with $2,487 per capita. Texas reported $2,284 in bond debt per resident, the 14th highest in the country, and Florida ranked 39th, with $785 per capita.

Indiana, Nebraska, Wyoming, Montana and Tennessee each reported less than $250 of bonded debt per resident. Indiana and Nebraska reported no outstanding bonds.

Reason Foundation’s State and Local Government Finance Report totals the liabilities of each state government, as well as the cities, towns, counties, and school districts within each state. This report covers all 50 state governments, over 2,000 county governments, 8,000 municipal governments, and 10,000 school districts, which serve 331 million Americans nationwide.

All figures in Reason Foundation’s State and Local Government Finance Report are sourced from state governments’ own financial reports, most often their annual comprehensive financial reports. The data in this report is from the 2023 fiscal year, the most recent year for which complete data are available. Nevada has not reported 2023 data. Therefore, the data the state reported for 2022 was used. Despite a thorough review, data collection at this scale can result in discrepancies. Please alert us if you identify any errors.

For personalized reports on municipal entities or more detailed information on assets, liquidity, and solvency, please visit the GovFinance Dashboard.

If you have any questions or would like to discuss this data further, please email Mariana Trujillo at mariana.trujillo@reason.org  or Jordan Campbell at jordan.campbell@reason.org.

Related:

Report: State and local governments have $6.1 trillion in debt

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Source: https://reason.org/transparency-project/gov-finance-2025/state/