Half of U.S. states do not raise enough money to pay all their bills, according to a new report from the nonprofit Truth in Accounting. Unlike the federal government, states must balance their budgets each year. But the report lays out how some states balance their books by excluding certain costs, such as future pension obligations or deferred maintenance. Statelines’ Kevin Hardy reports:
“This practice essentially shifts these financial responsibilities onto future taxpayers, leaving them to cover the expenses that should have been accounted for in the current budget,” the report states. In total, Truth in Accounting calculated states hold $2.2 trillion in assets and $2.9 trillion in debts. At $832 billion, unfunded pension obligations are the largest driver of state debts, according to the report.
During the 2024 fiscal year, Louisiana had $32.3 billion available to pay $48.6 billion worth of bills. The state would need $13,000 from each taxpayer to pay all its outstanding bills. Louisiana ranked 44th out of 50 states and received a “D” grade for its financing.
A cautionary tale on work requirements
Congressional Republicans have touted Georgia’s Pathways to Coverage program as a model for Medicaid work requirements that are included in the tax and budget megabill. But a new report on the program by the Government Accountability Office found that the Peach State has spent more than twice as much on administrative costs than on health care. The Current’s Margaret Coker, writing in ProPublica, elaborates:
The GAO analysis, which does not include all the Pathways administrative expenses detailed by the news outlets, shows that as of April the Georgia program had spent $54.2 million on administrative costs since 2021, compared to $26.1 million spent on health care costs. Nearly 90% of administrative expenditures came from the federal budget, the report concluded, meaning that Georgia’s experiment is being funded by taxpayers around the country.
Georgia chose the path of bureaucracy and red tape instead of simply expanding Medicaid eligibility to low-income adults, as Louisiana, 40 other states and the District of Columbia have done:
To qualify, Georgians had to prove that they work, study or volunteer at least 80 hours a month. But enrollment in Georgia Pathways has remained low. The most recent state data shows that 9,175 of the nearly quarter-million low-income Georgians eligible for the program were enrolled as of Aug. 31.
What’s behind rising unemployment for Black workers?
The unemployment rate for Black workers has increased for three consecutive months and now sits at 7.5%. Valerie Wilson of the Economic Policy Institute explains why this trend is part of a larger pattern:
An important signal that the rising Black unemployment rate may actually be more than a temporary blip in a notably volatile data series is that the share of employed Black adults between the ages of 25 and 54 is down compared to the last couple of years. After peaking at a historic annual high of 77.9% in 2024, the average so far this year is 76.6%. Until now, the rate had risen every year since 2021.
Increased unemployment for Black workers is being driven by job losses among Black women. Black men’s employment rates have remained relatively stable over the last three years. Wilson explains how a decrease in overall women’s unemployment is responsible for this disparity:
Figure C shows that women’s payroll employment has declined in eight industries between January and August of this year. The largest of those losses have occurred in professional and business services (–83,000), manufacturing (–41,000), and federal government (–33,000). Close to half of all workers in federal government and professional and business services are women, as are 29% of manufacturing workers (see Table 1).
Losing SNAP benefits because of paperwork issues
One in 8 working-age recipients of the Supplemental Nutrition Assistance Program lost their benefits because of paperwork or other bureaucratic issues. That’s the conclusion of a new brief from the Urban Institute. Poonam Gupta, Elaine Waxman and Michael Karpman explain the consequences of the program’s paperwork burden:
Reduction and loss of SNAP benefits are associated with increased household food insecurity and worse health (Ettinger de Cuba et al. 2019; Heflin et al. 2020). Program participants who fail to recertify on time are estimated to lose an average of $550 in benefits in the following year, though some experience much higher negative benefit impacts (Homonoff and Somerville 2021). In addition to its impact on families, churning increases states’ administrative costs.
The federal tax and budget megabill makes harmful changes to SNAP that will increase hardship for families and costs for states:
For instance, the law expands existing work requirements for “able-bodied adults without dependents” ages 18 to 54 by extending these requirements to adults ages 55 to 64 and to parents whose children are all ages 14 and older. This change will increase the share of adult SNAP participants who must document their work activities as a condition of receiving benefits or provide proof that they qualify for an exemption from the work requirement. Other provisions of the law shift administrative and benefit costs from the federal government to states in ways that will increase the burden on SNAP administrators and exacerbate recertification challenges for program participants.
Number of the Day
6.8% – Increase in personal income in Louisiana during the second quarter of 2025. Nationally, personal income increased 5.5% over the same period (Source: Bureau of Economic Analysis)