Report: Tennessee’s financial condition improves but challenges remain
(The Center Square) – Tennessee ranks fifth in Truth in Accounting’s annual Financial State of the States report with a $9,600 surplus per taxpayer, according to the report released Thursday.
However, uncertainty remains regarding the state’s pensions, which increased in 2023, the organization said.
Tennessee accumulated an additional $3.2 billion to pay its bills, according to the report.
“While its reported revenues exceeded expenses, this gain was partially offset by an increase in the state’s net pension liability,” the report said. “The investments in the state’s closed pension plans did not perform as well in the markets as hoped and changes were made to the economic and demographic assumptions used to estimate future benefit payments.”
The state’s unfunded pension benefits are at $1.1 billion, and the state’s unfunded retiree health care benefits are also at $1.1 billion, according to the report.
“Most states’ financial conditions improved in fiscal year 2023,” says Sheila Weinberg, founder and CEO of Truth in Accounting. “But the states should focus on bolstering their retirement systems so they can weather market downturns and other economic uncertainties in the future.”
The top-five ranking resulted in a “B” grade for the Volunteer State, which is given to any state with a taxpayer surplus of between $1 and $9,999, according to the organization. Tennessee was also ranked fifth in the 2023 report with a pertaxpayer surplus of $9,500.
The 50 states collectively have $2.9 trillion in debt and assets of $2.1 trillion, according to the organization.
“This debt includes $840 billion in pension liabilities and $492 billion in other post-employment benefits, primarily for retiree health care costs,” according to a release from Truth in Accounting.
North Dakota ranked first in the report with a per taxpayer surplus of $55,600, followed by Alaska with $55,100. Connecticut was the lowest-ranked state with a per taxpayer burden of $44,400. New Jersey was the second-lowest ranked state with a $42,500 per taxpayer burden.
