All states, except Vermont, have a balanced budget requirement, which means spending cannot exceed revenue in a given year. Yet, when you analyze a state's financial report, the majority of state governments are in the red. This means that to balance the budget—as is required by law in 49 states—elected officials have not included the true costs of the government in their budget calculations and have pushed costs onto future taxpayers. Unfortunately, the majority of states claim balanced budgets by shortchanging their retirement obligations. 

Elected officials are able to get away with these false claims of a balanced budget because state governments follow cash-basis accounting. With cash-based accounting, financial reports show expenses only when money is paid, not when debt or future expenses are incurred. This type of accounting encourages governments to underfund retirement obligations and count borrowed money as earned revenue. But citizens deserve the truth about state government finances. We present state finances using full-accrual accounting, which counts all expenses when they are incurred, not when they are paid. 

Financial State of the States

This comprehensive analysis of the 50 states’ finances includes the most up-to-date state finance and pension data, trends across the states, and key findings on a consistent basis since fiscal year 2009. The report is based on each state's audited Annual Comprehensive Financial Report and retirement plans’ reports. 

Previous Financial State of the States Reports

Financial Transparency Score Report

Report that scores each state government based on how transparent they are to the public about their finances.

2024 Financial Transparency Score

Previous Financial Transparency Score Reports

State Financial Reports

Links to each state's audited Annual Comprehensive Financial Report (ACFR)

State Budget Reports

The Truth About Balanced Budgets A Fifty State Study

Illinois budget transparency project

State Budget Timelines