The newest report from Truth in Accounting graded all U.S. states’ financial positions, placing Texas at 26 out of 50 states and giving it a financial grade of “C.”
Using a metric the group calls “taxpayer burden,” the nonprofit audits states based on whether their expenses are greater than their revenues. If their expenses are higher, they then calculate how much of that debt would fall on taxpayers.
According to the report, Texas did not have enough assets to cover its debts in 2023.
“The state increased its money available to pay bills by $28.9 billion,” the report reads. “However, Texas still needed $9.5 billion to pay all its bills.”
Because of the $9.5 billion shortfall, ridding the state of its liabilities would cost each taxpayer $900.
The taxpayer burden reached a high of $12,500 in 2020 and has been steadily decreasing since then.
While the report shows improvement, Andrew McVeigh of Texans for Fiscal Responsibility says that it does not paint the whole picture.
“State General Revenue appropriations grew roughly 32 percent session over session,” McVeigh told Texas Scorecard. “This means that more taxpayer money is being spent on government, rather than being returned to taxpayers in the form of lowering their tax burden. This government spending will need to continue to be funded year after year into the future unless the legislature decides to make cuts.”
The report reflects the weight of future debts but also reflects what Texas is doing right, according to James Quintero, policy director for the Texas Public Policy Foundation’s Taxpayer Protection Project.
“Over many decades, Texas has accrued tens of billions of dollars in unfunded pension and OPEB liabilities. The size and growth of these future debts weigh heavily on Texas’ financial health,” Quintero told Texas Scorecard. “On a brighter note, this latest report also reveals robust revenues, which indicates strong economic growth and investment. This is a major credit to the Texas Model of low taxes and limited government.”
“The solutions are clear,” wrote TFR, explaining that “reforming the budgeting process to prioritize transparency and sustainable spending, imposing spending limits on local governments to curb wasteful expenditures, eliminating corporate welfare programs like Chapter 403’s that divert taxpayer money to wealthy businesses, and banning taxpayer-funded lobbying” will help to ensure Texas’ successful future.
Truth in Accounting’s Financial State of the States 2024 report can be found here.
