Over half of U.S. states face financial challenges as 27 struggle to meet obligations

A report from Truth in Accounting reveals that 27 U.S. states ended fiscal year 2023 unable to meet their financial obligations. States like Connecticut, New Jersey, Illinois, and Massachusetts have the highest shortfalls per taxpayer. Federal aid during the pandemic temporarily helped states manage budgets, but this support is expected to decline by 2026. As a result, states may face higher taxes, reduced public services, and cuts to benefits programs. The financial strain is prompting some residents to move from high-tax states to those with better fiscal stability. Unfunded pension liabilities are a significant factor contributing to these budget challenges.