(The Center Square) – Kentucky is failing in terms of its financial health, according to a government watchdog.
In its “Financial State of the States” report, the think tank Truth in Accounting said Kentucky received a letter grade of “F” going into the COVID-19 pandemic, saying the state entered the crisis in dire fiscal health and will emerge even worse.
Overall, the report shows Kentucky with a per-taxpayer burden of $24,700 before the COVID-19 crisis – the amount each taxpayer would be on the hook for to pay off the state's debt – and ranked 44th among all 50 states.
According to Truth in Accounting CEO Shelia Weinberg, Kentucky’s financial condition was one of the worst before the pandemic.
“Going into the current crisis, Kentucky was the country’s sixth-worst state and needed almost $33 billion to pay the bills it had accumulated to date,” Weinberg said.
According to the report, Kentucky’s fiscal issues come mostly from unfunded retirement obligations that accumulated over the years.
The report said eight state governments have a “taxpayer burden” greater than $20,000 per taxpayer before the pandemic. Taxpayer burden is a calculation of the state’s debt divided by the number of taxpayers.
“Most states were woefully unprepared for any crisis, much less the one we are currently experiencing,” Weinberg said. “Combined, the states have accumulated more than $1.4 trillion in debt despite the fact that all states, except Vermont, have balanced budget requirements.”
According to Truth in Accounting’s rough estimates, the 50 states are projected to lose a combined $397 billion in revenue, with Kentucky accounting for roughly $5 billion of that.
Alaska, North Dakota and Wyoming are considered to be in the best financial shape, while Connecticut, Illinois and New Jersey are the worst with a debt burden per taxpayer of more than $50,000.