Location:
BUDGET, STATE; DEBT;

OLR Research Report


February 18, 2011

 

2011-R-0099

COMPARATIVE STATE DEBT BURDENS

By: Judith Lohman, Assistant Director

You asked for a comparison of Connecticut's state debt burden to that of other states, to the United States as a whole, and to that of selected other countries. You were especially interested in Connecticut's debt compared to its state gross domestic product (GDP) and how its debt-to- GDP ratio compares to those of other states and nations.

This report shows Connecticut's relative debt burden using three different measures:

1. the dollar amount of the state debt owed by every state resident (per-capita debt);

2. the percentage of the total income earned by all the state's residents it would take to pay the state's debts (debt as a percentage of personal income); and

3. state debt as a percentage of the total value of the goods and services produced in the state (debt-to-GDP ratio).

The last of these allows Connecticut's debt burden to be compared to that of both the U.S. and other nations.

Connecticut ranks high among states on all three measures, according to Moody's Investors Service. It is first in net tax-supported debt per capita, third in debt as a percentage of 2008 personal income, and third in debt-to-GDP ratio. On the other hand, Connecticut would rank 125th out of 131 if it were included in the Central Intelligence Agency's ranking of countries based on estimated debt-to-GDP ratios (See Tables 1 to 4, attached).

Moody's notes that debt-to-GDP ratios for governments outside the U.S. are usually higher because debt issuance in other countries is more centralized than in the U.S. Nevertheless, Moody's considers international comparisons useful “now that U.S. state credits are rated on the same scale as sovereign and subsovereign credits” (2010 State Debt Medians Report, Moody's Investors Service, May 2010, p. 3.).

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Table 1: Debt Per-Capita

 

Table 2: Debt as a % of 2008 Personal Income

Rank

State

Per-Capita Debt

Bond Rating

 

Rank

State

Debt

Percentage

1

Connecticut

$4,859

Aa2

 

1

Hawaii

9.9%

2

Massachusetts

4,606

Aa1

 

2

Massachusetts

9.2%

3

Hawaii

3,996

Aa1

 

3

Connecticut

8.7%

4

New Jersey

3,669

Aa2

 

4

New Jersey

7.2%

5

New York

3,135

Aa2

 

5

New York

6.5%

6

Delaware

2,489

Aa

 

6

Delaware

6.2%

7

California

2,362

A1

 

7

California

5.6%

8

Washington

2,226

Aa1

 

8

Kentucky

5.4%

9

Rhode Island

2,127

Aa2

 

9

Washington

5.3%

10

Oregon

1,859

Aa1

 

10

Oregon

5.2%

11

Illinois

1,856

Aa3

 

11

Rhode Island

5.2%

12

Wisconsin

1,720

Aa2

 

12

Mississippi

5.0%

13

Kentucky

1,685

Aa1*

 

13

Wisconsin

4.6%

14

Maryland

1,608

Aaa

 

14

Illinois

4.4%

15

Mississippi

1,478

Aa2

 

15

New Mexico

4.4%

16

New Mexico

1,398

Aaa

 

16

Louisiana

3.6%

17

Alaska

1,345

Aa1

 

17

West Virginia

3.5%

18

Louisiana

1,271

Aa2

 

18

Maryland

3.4%

19

Kansas

1,140

Aa1*

 

19

Georgia

3.3%

20

Florida

1,123

Aa1

 

20

Alaska

3.2%

21

Georgia

1,120

Aaa

 

21

Utah

3.2%

22

West Virginia

1,079

Aa2

 

22

Kansas

3.0%

23

Minnesota

1,037

Aa1

 

23

Florida

2.9%

24

Utah

957

Aaa

 

24

South Carolina

2.9%

25

Pennsylvania

938

Aa1

 

25

Arizona

2.6%

26

Ohio

933

Aa1

 

26

Ohio

2.4%

27

Nevada

925

Aa1

 

27

Alabama

2.4%

28

South Carolina

917

Aaa

 

28

Minnesota

2.4%

29

Virginia

895

Aaa

 

29

Pennsylvania

2.3%

30

Alabama

796

Aa1

 

30

Nevada

2.3%

31

Missouri

780

Aaa

 

31

North Carolina

2.3%

32

North Carolina

765

Aaa

 

32

Maine

2.2%

33

Maine

760

Aa2

 

33

Missouri

2.2%

34

Michigan

748

Aa2

 

34

Michigan

2.1%

35

Arizona

736

Aa2

 

35

Virginia

2.1%

36

Vermont

709

Aaa

 

36

Vermont

1.8%

37

New Hampshire

665

Aa1

 

37

Idaho

1.7%

38

Oklahoma

570

Aa2

 

38

New Hampshire

1.6%

39

Idaho

538

Aa1*

 

39

Oklahoma

1.6%

40

Texas

520

Aaa

 

40

Indiana

1.5%

41

Indiana

492

Aaa*

 

41

Texas

1.4%

42

Colorado

400

Aa1*

 

42

Montana

1.1%

43

Montana

358

Aa1*

 

43

Arkansas

1.0%

44

North Dakota

327

Aa1*

 

44

Colorado

1.0%

45

Tennessee

318

Aaa

 

45

Tennessee

0.9%

46

Arkansas

312

Aa1

 

46

North Dakota

0.8%

47

South Dakota

135

NGO**

 

47

South Dakota

0.4%

48

Wyoming

77

NGO**

 

48

Iowa

0.2%

49

Iowa

73

AaA*

 

49

Wyoming

0.2%

50

Nebraska

15

NGO**

 

50

Nebraska

0.0%

* Issuer Rating (No general obligation (GO) debt)

**No GO debt

   

Source: 2010 State Debt Medians Report, Moody's Investors Service, May 2010

 

Source: 2010 State Debt Medians Report, Moody's Investors Service, May 2010

Table 3: Debt to State GDP Ratio

 

Table 4: Debt to GDP Ratio, Connecticut & Selected Countries

Rank

State

Ratio

 

Rank

(out of 131)

Country

Ratio

1

Massachusetts

8.32%

 

1

Zimbabwe

241.6%

2

Hawaii

8.11%

 

2

Japan

196.0%

3

Connecticut

7.91%

 

4

Lebanon

150.7%

4

New Jersey

6.73%

 

5

Greece

144.0%

5

New York

5.35%

 

6

Iceland

123.8%

6

Mississippi

4.75%

 

7

Jamaica

123.2%

7

Rhode Island

4.73%

 

8

Italy

118.1%

8

California

4.73%

 

9

Belgium

102.5%

9

Kentucky

4.65%

 

10

Singapore

102.4%

10

Washington

4.60%

 

11

Ireland

98.5%

11

Oregon

4.40%

 

12

Sudan

94.2%

12

Wisconsin

4.05%

 

14

France

83.5%

13

Illinois

3.78%

 

15

Portugal

83.2%

14

Delaware

3.56%

 

16

Canada

82.9%

15

New Mexico

3.52%

 

17

Egypt

80.5%

16

Maryland

3.35%

 

20

Israel

77.3%

17

West Virginia

3.18%

 

21

United Kingdom

76.5%

18

Florida

2.80%

 

22

Germany

74.8%

19

Georgia

2.77%

 

27

Spain

63.4%

20

South Carolina

2.68%

 

31

Brazil

60.8%

21

Kansas

2.62%

 

36

United States

58.9%

22

Louisiana

2.57%

 

38

World

58.3%

23

Utah

2.43%

 

42

India

55.9%

24

Ohio

2.28%

 

43

Philippines

55.2%

25

Arizona

2.24%

 

47

Uruguay

52.7%

26

Alabama

2.20%

 

50

Poland

50.5%

27

Pennsylvania

2.14%

 

51

Argentina

50.3%

28

Minnesota

2.08%

 

52

Pakistan

49.9%

29

Maine

2.02%

 

54

Turkey

48.1%

30

Missouri

1.96%

 

56

Demark

46.6%

31

Alaska

1.96%

 

59

Finland

45.4%

32

Michigan

1.95%

 

65

Mexico

41.5%

33

Nevada

1.86%

 

68

Sweden

40.8%

34

North Carolina

1.79%

 

73

Switzerland

39.6%

35

Virginia

1.78%

 

78

Ukraine

38.4%

36

Vermont

1.73%

 

80

Serbia

37.8%

37

Idaho

1.58%

 

84

Cuba

34.4%

38

New Hampshire

1.47%

 

85

South Africa

33.2%

39

Oklahoma

1.43%

 

87

Taiwan

31.4%

40

Indiana

1.24%

 

91

Indonesia

26.4%

41

Texas

1.05%

 

97

New Zealand

25.5%

42

Montana

0.97%

 

102

Peru

23.6%

43

Arkansas

0.92%

 

107

Australia

22.4%

44

Colorado

0.81%

 

111

Hong Kong

18.2%

45

Tennessee

0.79%

 

112

China

17.5%

46

North Dakota

0.68%

 

117

Iran

16.2%

47

South Dakota

0.30%

 

123

Russia

9.5%

48

Iowa

0.16%

   

Connecticut

7.91%

49

Wyoming

0.12%

 

126

Chile

6.2%

50

Nebraska

0.03%

 

131

Libya

3.3%

Source: 2010 State Debt Medians Report, Moody's Investors Service, May 2010

 

Source: The World Factbook, Central Intelligence Agency