U.S. states' debt tops $4 trillion-report

Tue Aug 28, 2012 9:39pm IST

Aug 28 (Reuters) - America's 50 state governments owe $4.19 trillion, including outstanding bonds, unfunded pension commitments and budget gaps, according to a new report.

At $617.6 billion, California had by far the biggest total debt, more than twice the total of No. 2, New York, with $300.1 billion owed, according to State Budget Solutions, a research and non-partisan advocacy group.

Texas, with $287 billion owed, New Jersey, with $282.4 billion, and Illinois, with $271.1 billion, ranked next among states with the biggest total debt, according to State Budget Solutions. Vermont had the smallest debt load at $5.85 billion.

The annual study said state governments had benefited in the last year from smaller budget gaps and reductions in loans taken from the federal government during the worst of the Great Recession to pay unemployment claims.

Those trends helped reduce total debt, which includes medical insurance due retired government workers, from last year's $4.24 trillion of total debts owed by the 50 states, according to State Budget Solutions.

"Our states are in trouble and no amount of budget gimmicks, political posturing or hiding bills will fix the massive debt that they face," said Bob Williams, president of State Budget Solutions. "Drastic reforms, innovations and political courage are needed to put our states back on the road to fiscal survival."

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