Jordan Campbell, Author at Reason Foundation

Why teacher salaries are stagnant

Jordan Campbell — Thu, 04 Dec 2025 11:00:00 +0000

A large body of research shows that effective teachers are the most important school-related factor in determining student success, making teacher compensation a key policy lever. “We need to pay all teachers more—and effective teachers even more,” said Heather Peske of the National Council on Teacher Quality in a recent SCHOOLED debate on teacher pay.

Peske has a point. The nationwide average teacher salary fell by over 6 percent between 2002 and 2022, going from $75,152 to $70,548 in 2023 dollars, according to new Reason Foundation research. In total, inflation-adjusted teacher salaries fell in 40 of 50 states, as shown in Table 1.

It’s also a fact that teacher salaries are tied to educational attainment and years of experience, meaning that high-performing teachers—and those in shortage areas like math, science, and special education—aren’t paid more for their results or expertise.

To put the right incentives in place, bold teacher pay reforms are needed. But to maximize the long-term impact of these policies, it’s important to address the root causes of stagnant salaries. Examining data both before and after the COVID-19 pandemic reveals structural problems in K–12 finance that keep dollars out of teacher paychecks.

Table 1: Inflation-adjusted average teacher salary growth (2002 to 2022)

Teacher salaries before COVID-19

Nationwide, inflation-adjusted teacher pay was flat in the nearly two decades leading up to the pandemic, with the average salary falling by 0.6 percent between 2002 and 2020. While a handful of states saw big swings—salaries rose by 22 percent in Washington while falling 19 percent in Indiana—most states saw moderate changes, ranging from -5 percent to +5 percent over that period.

Remarkably, teachers’ salaries weren’t increasing at a time of unprecedented growth in public school funding, which rose by 25 percent per student as all but one state boosted K–12 spending from 2002 to 2020. Figure 1 shows the growth in K–12 revenue and teacher salaries during this period.

With education funding at record levels, why wasn’t more money going to teacher paychecks?

Figure 1: U.S. revenue per student growth vs. average teacher salary growth (2002-2020, inflation-adjusted)

A surge in non-teaching staff

One reason teacher pay didn’t grow with K–12 spending is that public schools spent heavily on hiring non-teaching staff. From 2002 to 2020, as student enrollment grew by 6.6 percent, non-teaching staff expanded by 20 percent. For every five new students, public schools added about one non-teacher. In comparison, the number of classroom teachers rose by 6.6 percent—mirroring enrollment growth, but well below growth in all other staff.

Figure 2 shows the growth of public-school staff by position type. The largest growth category was in student support, which includes social workers, psychologists, speech-language pathologists, and other positions. A nearly identical number of instructional aides—paraprofessionals who assist teachers and often work with students with disabilities—were also added to public school payrolls. Taken together, the data suggest that special education and a greater emphasis on wraparound services played large roles in the growth of non-teaching staff.

Figure 2: Public school staffing growth by position type (2002–2020)

Rising teacher pension debt

Another expense that diverted funding from teacher salaries was employee benefits, a Census Bureau category that includes pensions, Social Security, health insurance, and other costs. Between 2002 and 2020, benefit spending per student rose by 79 percent in inflation-adjusted dollars. While salary and wage spending increased by $573 per student, benefit spending increased by $1,745 per student. Research indicates that rising teacher pension costs were the primary factor behind this trend. States have failed to set aside enough money to pay for the pension benefits promised to teachers, resulting in unfunded liabilities that accumulate over time.

Pension debt can add up to big bucks: In 2024, the Teacher Retirement System of Texas had an estimated $62.6 billion in unfunded liabilities, while the California State Teachers’ Retirement System had $85.5 billion in debt. These costs are usually paid for by increasing school districts’ and teachers’ contribution rates to the pension plans. As a result, K–12 funding that might go to salaries has increasingly been directed toward pension costs, even as many states have reduced teachers’ retirement benefits.

Before the pandemic, the story was relatively straightforward: Teacher salaries stagnated despite significant increases in public school funding, primarily because funds increasingly went to hire non-teachers and cover unfunded pension liabilities. After the pandemic began, however, a different story emerged.

Teacher salaries after COVID-19

Teacher pay now plunged, falling 5.6 percent in fiscal year 2023 dollars, from $74,698 in 2020 to $70,548 in 2022. But this wasn’t because more dollars were going to new hires or benefit spending—the number of non-teachers dropped by 2 percent (before again rising sharply in 2023), and real expenditures on employee benefits inched up by $39 per student. While teacher turnover during the pandemic might have played a part, inflation during those years took a big bite out of teacher paychecks.

After the onset of COVID-19, price growth reached levels not seen since the 1980s. “We currently face macroeconomic challenges, including unacceptable levels of inflation,” said Janet Yellen, who was Treasury secretary at the time.

The price level during the 2022 school year was nearly 10 percent higher than just two years earlier. Large pay bumps were needed to keep pace with inflation, far more than the usual 3 percent or 4 percent that districts typically dole out. Yet this didn’t happen.

While school districts weren’t exactly strapped for cash—education funding rose by 7.4 percent between 2020 and 2022, reaching a new record of $20,097 per student in 2022—most of this $1,386 per-student increase came from federal Covid-19 relief funds. And because these dollars were temporary, many districts were hesitant to allocate them to long-term commitments such as teacher salary increases. Instead, they opted to spend the federal funding on things like building renovations, tutoring, and one-time bonuses.

Groups such as the American Federation of Teachers and the National Education Association lobbied hard for the stimulus funding that ultimately squeezed teachers’ purchasing power. The consensus among economists is that Covid-19 fiscal stimulus—including the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act signed by President Donald Trump and President Joe Biden’s $1.9 trillion American Rescue Plan, which sent $122 billion to public schools—helped lift inflation to historic levels. Public school lobbyists won the battle for pandemic relief funding, but that money didn’t increase teachers’ take-home pay even as inflation cut their purchasing power.

Conclusion

Public school staffing decisions and rising pension debt led to teacher salary stagnation in the years leading up to COVID-19. While teacher take-home pay failed to keep up with inflation during the pandemic, the rise in price levels was atypical—and due in part to the stimulus spending that teachers’ unions lobbied for.

For policymakers looking to boost teachers’ salaries today, states like Texas and Arkansas offer bold ideas for targeting dollars on effective teachers and those teaching in shortage areas. But to maximize the long-term impact of such reforms, they’ll also need to pay down pension debt, examine special-education costs, and encourage school districts to prioritize teacher pay over other expenses. That teachers’ wages had stagnated over two decades of unprecedented growth in public school funding highlights deep structural problems in K–12 finance that shouldn’t be ignored.

A version of this column first appeared at The Thomas B. Fordham Institute.

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State and local governments are drowning in debt

Jordan Campbell — Mon, 01 Dec 2025 11:00:00 +0000

The national debt recently surpassed $38 trillion, but America’s debt crisis isn’t limited to the federal government. Less well known is that, nationwide, state and local governments now hold more than $6.1 trillion of their debt.

States owe $2.7 trillion in debt, cities hold $1.4 trillion, school districts have $1.3 trillion, and counties owe $760 billion, according to a review by Reason Foundation of more than 20,000 financial statements filed by government entities for their 2023 fiscal years, the most recent period with complete data available.

In total, California’s state and local governments hold $1 trillion in debt, the highest in the nation. New York’s state and local debt is the second-most, at $800 billion, followed by Texas at $550 billion, Illinois at $410 billion, New Jersey at $310 billion, and Florida at $240 billion.

Additionally, Massachusetts, Pennsylvania, Ohio, Washington, Michigan, Georgia, Maryland, Connecticut, North Carolina, and Colorado each have more than $100 billion in state and local government debt.

On a per-capita basis, the state and local debt numbers are even more eye-opening, with states like Hawaii, Delaware, and Wyoming having surprisingly large debt loads per resident.

Nationally, state and local government debt amounts to about $18,400 per person. In New York, Connecticut, New Jersey, Illinois, and Hawaii, state and local debt exceeds $30,000 a person.

Following them are Massachusetts, California, Alaska, North Dakota, Delaware, Wyoming, and Maryland, all of which have state and local liabilities in excess of $20,000 per resident.

Over 40 percent of state and local government debt consists of unfunded pension and healthcare benefits promised to public workers. State and local pension debt amounts to $1.5 trillion, with an additional $1 trillion in healthcare benefits promised to retirees.

The bonds that governments issue to fund infrastructure projects, such as roads and bridges, to build and upgrade schools, and to pay for other programs, represent an additional 33 percent of all state and local debt.

These debts have three negative consequences for taxpayers. First, the annual interest costs and debt payments are starting to crowd out essential services. Many local governments are already being forced to divert funds from taxpayers’ priorities, such as education, policing, and transportation, to pay for promised public pension benefits that they haven’t set aside the necessary money for.

Second, as governments struggle to cover rising interest and pension payments, some politicians will seek to raise taxes and fees, placing a growing burden on taxpayers. The scale of tax increases needed to pay for these public pension debts could also hinder economic activity within communities, reducing revenues and further increasing debt woes.

Third, current levels of debt weaken long-term balance sheets, harming the future. Some cities and states haven’t borrowed or spent wisely, so they’ll be looking to borrow more money to modernize their infrastructure, schools, and technology in the years ahead. However, today’s debt burden will make borrowing more expensive and potentially raise the interest rates on new bond issuances, costing taxpayers even more.

To address this mountain of debt and restore fiscal stability, state and local governments must sustainably align spending with revenues. In years with a robust economy, governments should use budget surpluses to pay down debt rather than funding new or existing programs.

For mega-infrastructure projects, such as major highway and bridge repair, replacement, and expansion, public-private partnerships can be used, allowing the private sector to bear the initial construction costs and any overruns, rather than taxpayers.

Ultimately, the most significant drivers of state and local debt are pensions and retiree healthcare benefits, which must be reformed to ensure they are fully funded and prevent the accrual of debt.

State and local governments have far less ability to keep piling up debt the way the federal government does. The bill is coming due, and cities and states that pay down debt quickly and right-size government will be best positioned for the future.

A version of this column first appeared at The DC Journal.

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K-12 Education Spending Spotlight 2025: Annual public school spending nears $1 trillion

Jordan Campbell — Thu, 20 Nov 2025 05:01:00 +0000

This decade could go down as one of the most consequential in the history of U.S. public education. Between COVID-19 school closures, historic declines in public school enrollment, and the rise in school choice policies, the decisions made by state lawmakers in the coming years will help shape generations to come.

Policymakers must have the best data possible to inform their public education decisions. The following analysis from Reason Foundation’s K-12 Education Spending Spotlight brings together the latest figures from the U.S. Census Bureau and National Center for Education Statistics and highlights five key insights from our tool and their implications for state policymakers and other stakeholders.

These critical insights include examining and ranking every state’s total K-12 and per student public school funding, the public school enrollment levels in every state and how states continue to hire more non-teaching staff even as they lose students, how and why teachers’ salaries are failing to keep up with inflation in nearly every state, how much public school funding is increasingly being shifted to cover pension debt, and the disappointing student scores on key standardized tests since the pandemic.

Total U.S. public school funding is approaching $1 trillion and now exceeds $25,000 per student in eight states.

Nationwide, public school funding increased by 35.8% between 2002 and 2023, rising from $14,969 per student to $20,322 per student after adjusting for inflation, Reason Foundation’s K-12 Education Spending Spotlight finds.

In total, U.S. public schools received $946.5 billion in funding in 2023, with New York topping all states at $36,976 per student, followed by New Jersey at $30,267 per student.

Notably, eight states exceeded $25,000 per student in 2023: New York, New Jersey, Vermont ($29,169 per student), Connecticut ($28,975), Pennsylvania ($26,242), California ($25,941), Rhode Island ($25,709), and Hawaii ($25,485).

The lowest-spending state, Idaho, was the only state spending less than $12,000 per student. Utah, Oklahoma and North Carolina spent less than $14,000 per student.

Since the start of the COVID-19 pandemic, the largest increase in per-student spending has occurred in California, rising 31.5% from $19,724 in 2020 to $25,941 in 2023.

Michigan, Kentucky and Missouri were the next biggest percentage increasers, all spending 17% more per student in 2023 compared to 2020.

Per student spending also rose by over 15% from 2020 to 2023 in Hawaii, New Mexico, Arizona, Mississippi and Alabama.

Nationally, compared to pre-pandemic levels, K-12 funding is up by 8.6%, rising by $1,610 per student in real terms between 2020 and 2023. However, the bulk of these new education dollars, since 2020—approximately $1,181 per student—are from the $190 billion in federal COVID-19 relief funding that public schools received during the pandemic. While non-federal dollars increased by $429 per student during this time, this is a departure from pre-pandemic trends, when state and local funding rose by $1,089 per student between 2017 and 2020.

Policy implications of K-12 funding levels

For policymakers, K-12 funding has increased dramatically in the past couple of decades, with public schools in all 50 states seeing substantial increases. However, with federal pandemic relief funding now expired, combined with rising economic uncertainty, declining public school enrollment, and increased competition from school choice and homeschooling, the era of unrelenting public school funding growth may be coming to an end. Public school funding is at record levels, and state and local policymakers should shift the focus to maximizing the impact of existing K-12 dollars in ways that can improve student outcomes.

Public school funding is increasingly spent on employee benefits, including teacher pensions.

Inflation-adjusted K-12 education spending on employee benefits—which includes teacher pensions, health insurance, and other expenses—increased by 81.1% between 2002 and 2023, rising from $2,221 per student to $4,022 per student, Reason Foundation’s analysis shows.

In comparison, real spending on employee salaries grew modestly, rising from $8,449 per student to $9,098 per student, a 7.7% increase. As a result, for every new $1 that public schools spent on employee salaries between 2002 and 2023, benefit expenditures rose by $3.27. In 12 states, growth of employee benefits exceeded 100%, including Hawaii (194.1%), Vermont (171.3%), Illinois (169.9%), New Jersey (167.1%), and Pennsylvania (166.4%), as shown in Table 2.

In 2023, employee benefit costs in New Jersey were $8,333 per student. In New York, the cost was $7,949 per student. Vermont and Connecticut also spent more than $7,000 on employee benefits per student they serve.

Employee benefit costs also exceeded $5,000 per student in Pennsylvania, Illinois, Michigan, Massachusetts, Delaware, New Hampshire, Rhode Island, Wyoming, and Alaska.

Policy implications of rising benefits costs on K-12 spending

Research shows that teacher pension debt is the primary driver of rising benefit spending. For years, states have failed to set aside enough money to cover the pension benefits promised to teachers, resulting in hundreds of billions of dollars in unfunded liabilities (i.e., the difference between the total pension benefits owed to teachers and the dollars available in pension funds). Today, this means that more K-12 education funding must be used to cover pension costs, even while many states have reduced benefits for teachers, rather than in classrooms.

Policymakers should take steps to reverse this trend by paying down pension debt as fast as possible to avoid high-interest costs and modernizing antiquated assumptions and benefit designs. Otherwise, pension costs will continue to eat up a greater share of teachers’ paychecks and school districts’ budgets.

Despite plummeting enrollment, the surge in public school staffing has persisted.

Between 2002 and 2023, the number of public school staff increased by 15.1%, while student enrollment grew by only 4.1%. The bulk of new K-12 hires were non-teachers, which increased by 22.8%, such as counselors, social workers, speech pathologists, and instructional aides.

In comparison, the number of teachers rose by 7.6% during this time. Nationwide, non-teaching staff now account for over half, 52.5%, of all public school employees, up from 49.2% in 2002. Table 3 shows the growth in non-teaching staff, while Table 4 displays enrollment growth.

Since the start of the COVID-19 pandemic, the public school staffing surge has persisted. Despite public school enrollment falling by 1.18 million students between 2020 and 2023, public schools added over 81,000 non-teaching staff to their payrolls during that period.

For example, California has lost 318,532 students since 2020, but has added 3,400 non-teaching staff members, while New York has lost 159,701 students but has added 6,996 non-teaching staff members.

Public school enrollment fell in 39 states from 2020 to 2023.

The 2% increases in public school enrollment in Idaho and North Dakota were the largest gains in the country. The only other states where public school enrollment grew from 2020 to 2023 were South Dakota, Delaware, Louisiana, Utah, Alabama, Montana, Texas, Florida and South Carolina.

With a 6% decrease in public school enrollment, Hawaii has experienced the largest decline in public school students since the pandemic. Enrollment also decreased by more than five percent in New York, Mississippi, Oregon, and California, and by at least four percent in New Mexico, New Hampshire, Illinois, West Virginia, Colorado, Kentucky, Washington, Rhode Island, and Michigan, according to Reason Foundation’s analysis.

Policy implications of decreased public school enrollment and current staff sizes

With the National Center for Education Statistics projecting a 5.3% decline in public school enrollment between 2024 and 2032, current staffing levels are unsustainable. School closures are on the horizon in places like Boston, Houston, Seattle, and Oakland, but it will also be important to reduce staffing to levels that match enrollment.

To minimize the need for layoffs, school districts can leverage staff resignations and retirements, while also giving greater scrutiny to costly across-the-board pay increases. Critically, public schools should also consider the return on investment from decades of adding non-teaching personnel to their payrolls and whether this aligns with their core educational mission.

The average teacher salary has declined significantly since the onset of the COVID-19 pandemic.

Nationwide, the average inflation-adjusted teacher salary fell from $75,152 in 2002 to $70,548 in 2022, the most recent year with complete data available, a 6.1% decline, Reason Foundation finds.

However, most of this drop in teachers’ salaries occurred in the aftermath of the COVID-19 pandemic. Between 2002 and 2020, the average teacher salary remained virtually flat, decreasing by 0.6% to $74,698—but then from 2020 to 2022, it dropped by $4,151, or 5.6%.

From 2020 to 2022, the average teacher’s salary decreased by more than five percent in 38 states. They declined the most in North Carolina (−9.6%), New Mexico (−8.8%), South Carolina (−8.7%), West Virginia (−8.6%), and Mississippi (−8.2%).

Only one state, Minnesota, increased teachers’ salaries after the pandemic.

As a result of the decreases following the pandemic, only 10 states experienced positive gains in average teacher salary between 2002 and 2022, with Washington (18.6%), New York (12%), and Massachusetts (11.7%) leading the list, as shown in Table 5.

In comparison, three states saw teacher salaries decline by more than 20% from 2002 to 2022: North Carolina, Michigan, and Indiana.

Policy implications of teachers’ salaries declining

For over two decades, large and regular increases in public school funding haven’t boosted teacher salaries, and this is unlikely to change without structural reforms.

First, it’s important to understand why teacher salaries stagnated between 2002 and 2020. Public school revenue grew by $3,742 per student (25%) during this period, but funding increasingly went to cover the costs of support services spending, which rose by $1,135 per student (25.4%), and employee benefits, which increased by $1,745 per student (78.6%).

Because teacher pay is tied to years of experience and educational attainment—and teacher salaries vary substantially by state—it’s also possible that demographic shifts in the teacher population contributed to the observed trends. However, available federal data make it difficult to draw firm conclusions. While the share of teachers with over 20 years of experience has declined, educational attainment has increased, with the proportion of teachers holding only a bachelor’s degree falling over time.

What drove the decline in teacher salaries between 2020 and 2022?

Teacher turnover and other factors played a role, but historic inflation levels were likely the most significant factor. In the 2022 school year, the average monthly price level was 9.6% higher than it had been just two years earlier, negating funding increases from state legislatures and eating into teacher paychecks. Large and widespread increases in nominal pay would’ve been required just for teacher salaries to keep pace with inflation, let alone increase, during these years.

For policymakers, the key takeaway is that public school spending decisions, combined with rising pension costs, are eating into teachers’ paychecks. Even if teacher demographics have shifted over time, school officials are increasingly prioritizing spending education funding on non-teaching personnel, while unfunded pension liabilities also consume a larger share of K-12 dollars.

Student outcomes were falling even before the COVID-19 pandemic, despite record funding levels.

The National Assessment of Educational Progress (NAEP) is the gold standard for measuring national and state K-12 outcomes in math, reading, and other subjects. While the National Center for Education Statistics (NCES) publishes average scale scores that are precise, they also publish more intuitive proficiency levels: Basic, Proficient, and Advanced.

Importantly, the proficient benchmark is an aggressive target that doesn’t equate with grade-level proficiency or meeting state standards. According to NCES, “Students performing at or above the NAEP Proficient level on NAEP assessments demonstrate solid academic performance and competency over challenging subject matter.” For this reason, our analysis focuses on the share of students who perform below the basic performance threshold.

Across all four subjects examined—4th and 8th-grade math and reading—the trend is clear: the share of students scoring below NAEP basic fell between 2003 and 2013, increased by 2019, and then grew sharply in the wake of the COVID-19 pandemic in 2022. Except for 4th-grade math, scores regressed again from 2022 to 2024, and outcomes in all four subjects were worse in 2024 than in 2003. These figures are presented in Table 6 below.

For low-income students, a similar trend is observed, as shown in Table 7. Student performance improved from 2003 to 2013, worsened before the pandemic in 2019, and then dropped dramatically in 2022.

By 2024, low-income 8th graders fared worse than they did in 2003, while 4th-grade students still performed slightly better. Notably, performance in three of the four subjects was worse in 2024 than in 2022.

Policy implications of NAEP scores

For policymakers, a pressing concern is the widespread failure of public schools to get students back up to speed in the wake of the COVID-19 pandemic, despite receiving $190 billion in federal Elementary and Secondary School Emergency (ESSER) relief funding during the pandemic.

Research shows that public schools were given more than enough money to reopen safely; yet, many used the windfall to prioritize things other than academics, even as students fell behind. For instance, researchers at Georgetown University’s Edunomics Lab estimate that approximately 20% of the federal pandemic relief dollars were allocated to school facilities, including building repairs and HVAC upgrades. While this was permitted under the law—and some public schools used their federal relief funds wisely—ESSER was a policy failure, especially when viewed through the lens of student achievement.

It’s also notable that, even before the pandemic, student outcomes were trending downward despite record education funding levels across states. For example, 34% of 4th graders and 27% of 8th graders scored below basic on NAEP reading in 2019. While gains were made between 2003 and 2013, a large share of students still scored below the lowest performance threshold in this peak year.

Conclusion

In the years ahead, policymakers will need to address a complex set of K-12 challenges, including declining public school enrollment, bloated staffing for current and projected enrollment levels, mounting pension costs and debt, stagnant teacher salaries, and underwhelming academic outcomes. These problems arose during a period when public schools saw historic funding increases, and money alone won’t solve them.

Instead, lawmakers will need policy solutions that address their root causes and maximize the use of existing K-12 funding. Reason Foundation’s K-12 Education Spending Spotlight aims to help them get started.

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Report: Cities have $1.4 trillion in debt

Jordan Campbell — Mon, 17 Nov 2025 05:06:00 +0000

Nationally, cities report $1.4 trillion in debt, equivalent to approximately $7,000 per capita, according to Reason Foundation’s State and Local Government Finance Report.

The cities of New York, Chicago, Los Angeles, the city and county of San Francisco*, and Houston report the most total liabilities.

The $1.4 trillion in debt carried by cities, towns, and other incorporated municipalities represents 23% of total state and local government debt found in the State and Local Government Finance Report, which can be explored interactively in Reason Foundation’s GovFinance Dashboard.

In per capita terms for cities with 10,000 residents or more, the city and county of San Francisco* ranks first, with total liabilities representing about $43,000 per resident. The rest of the top five cities in per capita debt are Nantucket (MA), New York, Ocean City (NJ), and Miami Beach.

Total debt, reported as “total liabilities,” includes money a city owes in the near term, such as unpaid bills and accrued payroll, as well as long-term obligations, including bonds, pensions, and retiree healthcare.

Reason Foundation extracted this data from publicly available, audited financial reports filed by each county for their fiscal year 2023. While the dashboard covers 90% of the U.S. population living in an incorporated city, this analysis displays the top 50 cities in each category, among cities with 10,000 residents or more.

* Several jurisdictions in the United States operate under consolidated city–county governments, meaning their financial data reflect both city and county functions. Due to their structure and financial reporting practices, these entities could be considered either a city or a county, and therefore, are listed in both the city and county rankings of this report, which can make some comparisons to other cities or counties difficult. Some of the entities most impacted in the rankings and figures are San Francisco, Denver, Honolulu, Nashville, New Orleans, New York and Philadelphia.

The combined entities in the report include the city and borough of Juneau (AK), city and borough of Sitka (AK), city and borough of Wrangell (AK), city and county of San Francisco (CA), city and county of Broomfield (CO), city and county of Denver (CO), Jacksonville (FL), Athens–Clarke County (GA), Columbus–Muscogee County (GA), Georgetown–Quitman County (GA), Macon–Bibb County (GA), city and county of Honolulu (HI), Greeley County (KS), Wyandotte County (KS), Lexington–Fayette Urban County (KY), Louisville/Jefferson County Metro Government (KY), New Orleans (LA), Anaconda–Deer Lodge County (MT), Butte–Silver Bow County (MT), Philadelphia (PA), Lynchburg–Moore County Metropolitan Government (TN), and Nashville–Davidson County (TN). In our aggregate figures, these entities are added to the “county total.”

The five New York City counties—Bronx, Kings, New York, Queens, and Richmond—are consolidated in a single city government and financial report and are listed collectively as New York City in this report.

Baltimore (MD), St. Louis (MO), Chesapeake (VA), Norfolk (VA), Virginia Beach (VA), Baton Rouge (LA), and the District of Columbia (DC) are independent city governments. They have no overlapping county, and perform both municipal and county functions—or in the case of Baton Rouge, the county government falls under the umbrella of the city. In our aggregate figures, these entities are added to the “municipal total.” For more details, please see the report’s about page.

City governments’ long-term debt

About 85% of city debt is long-term—that is, due in more than one year. This category consists of bonds, loans, and notes (50%), unfunded pension liabilities (25%), unfunded retiree health care (18%), and accrued leave payouts (2%).

Cities collectively report $1.2 trillion in long-term debt, or about $6,000 per capita nationally.

New York, Chicago, Los Angeles, the city and county of San Francisco, and Houston declared the most total long-term debt.

For cities with 10,000 residents or more, the city and county of San Francisco ranks first in per capita long-term debt, at $36,602 per resident, followed by Ocean City (NJ), Nantucket (MA), New York City, and Miami Beach.

City government pension debt

Unfunded pension liabilities arise when governments set aside fewer assets than required to fulfill the retirement benefits promised to its public employees–declared as net pension liability.

Cities collectively report nearly $300 billion in unfunded pension obligations, equal to 25% of their long-term debt and equivalent to about $1,500 per capita nationally.

For cities with 10,000 residents or more, New York City has the most total public pension debt at $40 billion, followed by Chicago, Los Angeles, Phoenix, and Philadelphia.

In per capita terms, the city of Chicago ranks first, with its pension debt representing about $13,500 per resident. Beverly Hills, Miami Beach, Riverdale (IL), and Forest Park (IL) follow.

City government OPEB debt

Other post-employment benefits (OPEB) are mostly retiree health care for public employees. OPEB debt arises when governments promise these benefits but do not set aside enough money in advance to cover the future costs, which are declared as net OPEB liability.

Cities collectively report $215 billion in OPEB debt, equal to 18% of their long-term debt, equivalent to roughly $1,100 per capita nationally.

The city New York has the most total pension debt at $95 billion, followed by city and county of San Francisco, Austin, Yonkers (NY), and Boston.

In per capita terms, among cities with 10,000 residents or more, the city of Yonkers (NY) ranks first, with its OPEB debt representing about $12,100 per resident. Waltham (MA), New York, Hoboken (NJ), and Plattsburgh (NY) follow.

City governments’ outstanding bonded debt

Bonds, loans, and notes represent the portion of a city’s long-term liabilities explicitly borrowed in credit markets. Unlike pensions or OPEB, which accumulate as estimated unfunded promises, these instruments are contractual debt obligations with fixed repayment schedules.

Nationally, cities report $608 billion in outstanding bonds, loans, and notes—50% of all long-term liabilities. This equals about $3,000 per capita.

New York City has the most total bonded debt at $105 billion, followed by Los Angeles, Chicago, the city and county of San Francisco, and Houston.

In per capita terms, the city and county of San Francisco (CA) ranks first, with its bonded debt representing about $27,900 per resident. Celina (TX), Salt Lake City (UT), Nantucket (MA), and Washington (DC) follow.

Reason Foundation’s State and Local Government Finance Report totals the liabilities of each state government, as well as the cities, towns, counties, and school districts within each state. This report covers all 50 state governments, over 2,000 county governments, 8,000 municipal governments, and 10,000 school districts, which serve 331 million Americans nationwide.

All figures in the State and Local Government Finance Report are sourced from the financial reports of state and local governments, most often their annual comprehensive financial reports. The data is from the 2023 fiscal year, the most recent year for which complete data are available. Nevada and a handful of cities and counties across the country have not reported 2023 data. Our database lists the available 2023 fiscal year data for each city.

Despite a thorough review, data collection at this scale can result in discrepancies. Please alert us if you identify any errors.

For personalized reports on municipal entities or more detailed information on assets, liquidity, and solvency, please visit the GovFinance Dashboard.

If you have any questions or would like to discuss this data more, please email Mariana Trujillo at mariana.trujillo@reason.org or Jordan Campbell at jordan.campbell@reason.org.

Report: State and local governments have $6.1 trillion in debt

Report ranks every state’s total debt, from California’s $497 billion to South Dakota’s $2 billion

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Report: County governments have $757 billion in debt

Jordan Campbell — Mon, 17 Nov 2025 05:05:00 +0000

County governments had $757 billion in debt at the end of 2023, equivalent to approximately $2,600 per capita nationwide, according to Reason Foundation’s State and Local Government Finance Report.

Los Angeles County has the most debt of any county government: $62.36 billion.

The combined city and county of San Francisco and Miami-Dade County each had more than $30 billion in debt at the end of 2023. Cook County and the combined city and county of Philadelphia were next, with over $20 billion in debt.

The rest of the 10 most-indebted counties at the end of 2023 were Washington, D.C. ($19.83 billion), the combined city and county of Denver* ($14.3 billion), Nassau County ($14.2 billion), Santa Clara County ($13.4 billion), and the combined city and county of Honolulu* ($12 billion).

This analysis is part of Reason Foundation’s State and Local Government Finance Report, which can be explored interactively in the GovFinance Dashboard. Reason Foundation extracted this data from publicly available, audited financial reports filed by each county for their fiscal year 2023.

Total debt, reported as total liabilities, includes money a county government owes in the near term, such as unpaid bills and accrued payroll, as well as long-term obligations, including bonds, public pension benefits, and retiree health care benefits.

In per capita terms, North Slope Borough, Alaska, ranks first, with its total debt representing $46,883 per county resident.

For counties with 10,000 residents or more, the combined city and county of San Francisco, Washington, DC, the combined city and county of Denver, and Baltimore have the next highest per capita debt levels.

At $12,880 per person, Los Alamos County, New Mexico, has the sixth most per capita county debt.

For counties with 10,000 residents or more, a total of 43 counties reported at least $7,000 in per capita debt, including 21 counties with more than $10,000 in per capita debt.

The five New York City counties—Bronx, Kings, New York, Queens, and Richmond—are consolidated in a single city government and financial report and are listed collectively as the city of New York (NY) in this report.

Baltimore (MD), St. Louis (MO), Chesapeake (VA), Norfolk (VA), Virginia Beach (VA), Baton Rouge (LA), and the District of Columbia (DC) are independent city governments. They have no overlapping county, and perform both municipal and county functions—or in the case of Baton Rouge the county government falls under the umbrella of the city. In our aggregate figures, these entities are added to the “municipal total.” For more details, please see the report’s about page.

Long-term debt

About 80% of county debt is long-term debt, which is due in more than one year. Long-term debt consists of bonds, loans, and notes (44%), unfunded pension liabilities (29%), unfunded retiree health care (17%), and accrued leave payouts (3%).

Counties collectively report $624 billion in long-term debt, or $2,200 per capita nationally.

Los Angeles County has the most long-term liabilities at $52 billion, followed by the combined city and county of San Francisco, Miami-Dade County, Cook County, and the combined city and county of Philadelphia.

In per capita terms, for counties with 10,000 residents or more, the city and county of San Francisco has the most long-term liabilities, representing $46,883 per resident. North Slope Borough, Alaska, was second, with more than $35,000 in long-term debt per resident, followed by Washington, D.C., with over $23,000 per capita.

The combined city and county of Denver, Baltimore, Los Alamos County (NM), the combined city and county of Honolulu, Cape May County (NJ), Inyo County (CA), the combined city of Nashville-Davidson County (TN), and Miami-Dade County also had long-term liabilities exceeding $10,000 per capita.

County pension debt

Unfunded pension liabilities arise when governments set aside fewer assets than required to fulfill the retirement benefits promised to their public employees, which are declared as net pension liabilities.

At the end of 2023, counties collectively reported $181 billion in unfunded pension obligations, which represent 30% of their long-term debt. On a per capita basis, this county pension debt amounts to about $600 per person nationally.

Los Angeles County has the most public pension debt at $13.2 billion, followed by Cook County, Santa Clara County, San Diego County, and the combined city and county of Philadelphia.

In per capita terms, for counties with 10,000 residents or more, North Slope Borough, Alaska, ranks highest in the nation, with its public pension debt representing $12,318 per county resident, followed by Los Alamos County ($6,057 per capita), Mono County ($5,111), Juneau City and Borough ($4,386), Inyo County ($4,363) and Colusa County ($4,220).

Outstanding bonded debt

Bonds, loans, and notes represent the portion of a state government’s long-term liabilities that are explicitly borrowed in credit markets. Unlike public pension benefits or OPEB, which accumulate as estimated unfunded promises, these instruments are contractual debt obligations with fixed repayment schedules.

Nationally, counties report $275 billion in outstanding bonds, loans, and notes, which represent 44% of their long-term debt. On a per capita basis, this equals $956 per capita nationally.

The city and county of San Francisco has the most total bonded debt at $23.5 billion, followed by Miami-Dade County ($19.5 billion), Washington, DC ($12.6 billion), city and county of Denver ($9.9 billion, and city and county Honolulu ($7.1 billion).

In per capita terms, San Francisco ranks first, with its bonded debt representing $26,892 per resident. North Slope Borough, Washington, DC, Denver, and Arlington County (VA) were the next highest.

Despite a thorough review, data collection at this scale can result in discrepancies. Please alert us if you identify any errors.

For personalized reports on municipal entities or more detailed information on assets, liquidity, and solvency, please visit the GovFinance Dashboard.

If you have any questions or would like to discuss this data more, please email Mariana Trujillo at mariana.trujillo@reason.org or Jordan Campbell at jordan.campbell@reason.org.

Report: State and local governments have $6.1 trillion in debt

Report ranks every state’s total debt, from California’s $497 billion to South Dakota’s $2 billion

The post Report: County governments have $757 billion in debt appeared first on Reason Foundation.

Study: Illinois, Connecticut, Alaska, Hawaii, New Jersey and Mississippi have the most per capita pension debt

Jordan Campbell — Thu, 30 Oct 2025 04:05:00 +0000

Nationwide, 47 of the 50 states had public pension debt at the end of 2024, Reason Foundation’s Annual Pension Solvency Report finds. The study shows that 23 states each had over $20 billion in unfunded pension liabilities at the end of the 2024 fiscal year, the most recent year with complete data available.

Two states had more than $200 billion in public pension debt: California ($265 billion in unfunded pension liabilities) and Illinois ($201 billion).

Two other states reported more than $90 billion in unfunded pension liabilities: Texas ($92.2 billion) and New Jersey ($92 billion).

Unfunded liabilities exceeded $60 billion in two additional states: Pennsylvania ($67 billion) and Ohio ($61 billion).

Fourteen states have more than $30 billion in unfunded liabilities, including Massachusetts ($44 billion), Florida ($44 billion), New York ($45 billion), Kentucky ($40 billion), Connecticut ($37 billion), Michigan ($36 billion), Georgia, ($33 billion), and Maryland ($31 billion).

Tennessee, Washington, and South Dakota are the only three states that did not report any aggregate unfunded pension liabilities at the end of 2024, according to Reason Foundation’s pension report.

With $15,804 in pension debt per person, Illinois has the highest unfunded pension liabilities per capita, according to the Reason Foundation report.

Connecticut has the second-most public pension debt per capita at $10,151.

Six other states have public pension debt exceeding $8,000 per person: Alaska ($9,990), Hawaii ($9,784), New Jersey ($9,688), Mississippi ($9,033), New Mexico ($8,641), and Kentucky ($8,626).

California and Massachusetts have more than $6,000 in pension debt per resident.

Thirty-five states have at least $2,000 in public pension debt per capita, and 45 have at least $1,000 per person.

In the aggregate, state and local pension plans had $1.48 trillion in debt. Reason Foundation finds that the median funded ratio of all U.S. public pension plans was 79% at the end of 2024. This means governments have 79 cents for every dollar of pension benefits already promised to public workers and retirees.

With its public pension systems just 52% funded, Illinois has the worst funded ratio in the nation.

The other states with funding below 60% are Kentucky (54%), New Jersey (55%), Mississippi (56%), and Connecticut (59.5%).

State with public pension systems with funded ratios below 70% are South Carolina (62%), Hawaii (63%), Rhode Island (65%), New Mexico (66%), Pennsylvania (66%), Massachusetts (66%), Vermont (67%), New Hampshire (69%), and Colorado (70%).

Just three states had fully funded public pension systems at the end of 2024: Tennessee (104% funded), Washington (102%), and South Dakota (100%) and another six states were over 90% funded.

For detailed information about public pension plans’ unfunded liabilities, asset allocation, contribution rates, stress testing, and more, please visit Reason Foundation’s full Annual Pension Solvency and Performance Report.

The report ranks public pension systems from best to worst across five core dimensions: funded status, investment performance, contribution rate adequacy, asset allocation risk, and probability of meeting assumed returns.

Reason Foundation extracted these values from publicly available audited financial reports. Despite a thorough review, data collection at this scale can lead to discrepancies. Please alert us if you identify any errors. Reason Foundation’s pension team provides tailored technical assistance and resources to address the specific needs of states, counties, and cities. So please don’t hesitate to contact us at pensionhelpdesk@reason.org.

The post Study: Illinois, Connecticut, Alaska, Hawaii, New Jersey and Mississippi have the most per capita pension debt appeared first on Reason Foundation.

The public pension plans with the most debt, best and worst investment return rates

Jordan Campbell — Thu, 30 Oct 2025 04:02:00 +0000

Forty-four public pension systems in the United States had more than $10 billion in debt each at the end of their 2024 fiscal years, a new Reason Foundation report finds. The study also identifies the pension plans that produced the worst investment returns and those that saw their unfunded liabilities grow in a year with a very strong stock market.

Reason Foundation finds that 18 public pension plans now have over $20 billion in debt each, nine systems have more than $30 billion, and one, CalPERS, has over $100 billion in unfunded liabilities. At $166 billion in debt, the California Public Employees Retirement Fund, the largest public pension system in the country, had the most pension debt in the nation at the end of 2024, the most recent year with complete data available.

The next five public pension systems with the most unfunded liabilities are all teachers’ retirement plans: the Illinois Teachers Retirement System ($83 billion in unfunded liabilities), the Texas Teacher Retirement System ($63 billion), the Pennsylvania Public School Employees’ Retirement System ($43 billion), the New Jersey Teachers’ Pension and Annuity Fund ($41 billion), and the California State Teachers Retirement System ($40 billion).

The three other public pension systems with over $30 billion in unfunded liabilities are the Florida Retirement System ($39 billion), the New Jersey Public Employees Retirement System ($31 billion), and the Illinois State Employees Retirement System ($30 billion).

In the aggregate, the nation’s public pension systems reduced their unfunded liabilities from $1.62 trillion in 2023 to $1.48 trillion in 2024, a 9% decrease. But three public pension systems saw their debt grow by more than $1 billion in 2024. Unfunded liabilities grew by over $500 million in another five additional plans.

With a $1.54 billion increase in unfunded liabilities, the Maryland Teachers’ Retirement System saw the largest growth in public pension debt in the nation from 2023 to 2024. The system now has $14.56 billion in debt.

Unfunded liabilities also increased by over $1 billion in 2024 in the Massachusetts Teachers’ Retirement System ($1.17 billion increase in debt) and the Illinois Teachers’ Retirement System ($1.01 billion).

From 2023 to 2024, public pension debt increased by over $500 billion in another five plans: the Maryland State Employees’ Retirement System ($735 million increase in unfunded liabilities), the Alameda County Employees’ Retirement Association ($678 million), the Illinois State University Retirement System ($628 million), the New Mexico Public Employees Retirement Association ($601 million), and the Indiana Public Employees Retirement Fund ($502 million).

The 2024 fiscal year was strong for most investors and the stock market, but some public pension plans lagged behind. Failing to meet investment expectations increases public pension debt and taxpayers’ costs. The median investment return for public retirement systems in 2024 was 9.88%, according to Reason Foundation’s Annual Pension Solvency and Performance Report.

The Fire Fighters’ Relief and Retirement Fund of Austin, Texas, earned just a 4.7% return in 2024. It was the only pension system in the nation that earned less than a 5% return in 2024. The fund’s debt increased from $297.5 million to $349.5 million in 2024.

Five other public pension plans failed earn a 6% returns in 2024: the Kansas City Public School Retirement System (5.2%), the Educational Employees’ Supplementary Retirement System of Fairfax County (5.68%), Oregon Public Employees Retirement System(5.8%), Omaha City Employees Retirement System (5.92%), and the South Dakota Retirement System (5.98%).

At the other end of the spectrum, Reason Foundation finds that 11 public pension plans earned investment returns of over 15% in 2024, and five plans produced returns exceeding 20%. 

The Miami General Employees and Sanitation Employees Plan earned a 24% return rate in 2024, the highest in the nation.

The Michigan Legislative Retirement System (23.94% return), the Alabama Judicial Retirement Fund (22.21%), the Alabama Employees’ Retirement System (ERS) (21.2%), and the Alabama Teachers’ Retirement System (21.1%) also produced returns of over 20% for 2024.

These values were extracted from publicly available audited financial reports. Despite a thorough review, data collection at this scale can lead to discrepancies. Please alert us if you identify any errors. Reason Foundation’s pension team provides tailored technical assistance and resources to address the specific needs of states, counties, and cities. So please don’t hesitate to contact us at pensionhelpdesk@reason.org.

The post The public pension plans with the most debt, best and worst investment return rates appeared first on Reason Foundation.

Report: State and local pension plans have $1.48 trillion in debt

Jordan Campbell — Thu, 30 Oct 2025 04:00:00 +0000

Public pension systems in the United States saw a decrease in unfunded liabilities in 2024, dropping from $1.62 trillion to $1.48 trillion, a 9% decrease, Reason Foundation’s 2025 Pension Solvency and Performance Report finds. This was primarily driven by the higher-than-expected investment returns in the 2024 fiscal year.

State pension plans continue to carry the majority of the nation’s public pension debt, holding $1.29 trillion in unfunded liabilities, compared to local governments’ $187 billion in debt, Reason Foundation finds.

The median funded ratio of this report’s sample of pension plans stood at 78% at the end of 2024, a 3% increase from last year. This indicates that, while public pension funding has improved over the previous year, governments have still saved only 78 cents of every dollar needed to provide promised retirement benefits.

Reason Foundation’s stress tests also suggest that public pensions remain vulnerable to market downturns. A single economic recession could significantly increase their unfunded accrued liabilities, potentially raising the state and local total of public pension debt to as much as $2.74 trillion by 2026.

The Pension Solvency and Performance Report provides a comprehensive overview of the current and future status of state and local public pension funds. As the nation navigates another year marked by significant economic fluctuations and demographic shifts, this report assesses the resilience and adaptability of U.S. public pension systems. This analysis ranks, aggregates, and contrasts public pension plans based on their funding, investment outcomes, actuarial assumptions, and other indicators.

In addition to 24 years of historical data, the 2025 edition of Reason Foundation’s Pension Solvency and Performance Report includes financial and actuarial data from the pension plans’ 2024 fiscal year, the most recent year for which most government pension plans have reported data.

This edition of the report ranks public pension systems from best to worst across five core dimensions: funded status, investment performance, contribution rate adequacy, asset allocation risk, and probability of meeting assumed returns. Together, these measures reveal which states have positioned their public pension systems for long-term stability and which remain vulnerable to rising costs, market volatility, and political shortfalls in funding discipline.

Unfunded public pension liabilities

In recent decades, public pension systems in the U.S. have seen a significant increase in unfunded liabilities, particularly during the Great Recession. Between 2007 and 2010, unfunded public pension liabilities grew by over $1.15 trillion—an 809% increase—reflecting the financial challenges faced during that period. Despite some improvements in funding ratios over the last decade, these pension liabilities have continued to rise, underscoring ongoing financial pressures on state and local governments and taxpayers.

As of the end of the 2024 fiscal year for each public pension system, total unfunded public pension liabilities (UAL) reached $1.48 trillion, with state pension plans carrying the majority of the debt.

Nationwide, the median funded ratio of public pension plans stood at 78% at the end of 2024. Still, stress tests suggest that another economic downturn could significantly increase unfunded liabilities, potentially raising the total to $2.74 trillion by 2026.

Funded ratios of public pensions

The funded ratio of public pensions, which indicates the percentage of promised benefits that are currently funded, has experienced considerable fluctuations. After returning to 96% funded in 2007, the funded ratio of U.S. public pension systems fell to 64% during the Great Recession. Although funded ratios have recovered somewhat, they remain susceptible to market downturns.

A stress test scenario for 2026, assessing the impact of a 20% market downturn, indicates that the average funding level of public pension plans could fall to 63%. This could lead to critical underfunding for many pension plans, raising concerns about their ability to fulfill future obligations.

Changes in investment strategies

Over the past two decades, investment strategies of public pension funds have shifted notably. Allocations to traditional asset classes, like public equities and fixed income, have decreased while investments in alternative assets, such as private equity, real estate, and hedge funds, have increased. This shift reflects a strategic move for pension systems trying to achieve higher investment returns in a challenging market environment.

By the end of the 2024 fiscal year for each pension system, public pension funds managed approximately $5.49 trillion in assets, with a significant portion now invested in alternative assets, such as private equity/credit, and hedge funds. While these alternative investments may offer the potential for higher returns, they also introduce greater complexity and risk.

Investment performance

Public pension funds have faced challenges meeting their assumed rates of return (ARRs). Over the past 24 years, the national average annual rate of investment returns of pension systems has been 6.62%—still below what the plans had assumed. The average assumed rate of return for public pensions has been gradually reduced from 8.02% in 2001 to 6.87% in 2024.

Failing to meet their overly optimistic assumed rates of return has contributed to a significant increase in unfunded liabilities, requiring additional pension contributions from state and local governments, i.e., taxpayers, to maintain funding levels.

Investment returns themselves have varied widely, with public pension plans posting very strong gains in 2021 (25.4% returns), in contrast to large losses in 2009 (-12.9% returns on average) and further losses in 2022 (-5.1%). This volatility between expected rates of return and actual investment returns has created budgetary challenges for governments and taxpayers.

Employer contributions and cash flow

Employer contributions continue to dominate pension funding, while employee rates remain stable. In 2024, the total contribution rate was 28.8% of payroll, with employers covering 21.6% and debt amortization alone consuming 15.7%. More than half of all contributions—54%—went to paying down past pension debt rather than funding new benefits.

Net cash flows improved modestly, narrowing to -1.7% of assets, but systems remain reliant on strong investment returns to cover ongoing benefit payments.

Conclusion

Despite a year of substantial market gains and improved funding ratios, systemic risks remain for public pension systems. Far too many pension plans continue to rely on optimistic return assumptions, volatile markets, and a heavy reliance on taxpayer contributions to manage their legacy debt. Without sustained public pension reforms and more disciplined funding policies, today’s limited progress could quickly reverse.

This report was produced by Reason Foundation’s Pension Integrity Project, an initiative to conduct research and provide consulting and insight about the public pension challenges our nation grapples with.

Webinar

To dive deeper into the findings, watch our pre-recorded webinar below, where Reason Foundation’s Pension Integrity Project team details the report’s findings, explains key trends, and unpacks what these results mean for state and local governments, public employees, and taxpayers.

Study: Illinois, Connecticut, Alaska, Hawaii, New Jersey and Mississippi have the most per capita pension debt

The public pension plans with the most debt, worst investment returns of the year

The post Report: State and local pension plans have $1.48 trillion in debt appeared first on Reason Foundation.

Report ranks every state’s debt, from California’s $497 billion to South Dakota’s $2 billion

Jordan Campbell — Thu, 23 Oct 2025 04:02:00 +0000

State governments had $2.7 trillion in debt at the end of 2023, a new Reason Foundation analysis finds. This state debt is equivalent to approximately $8,000 per person nationally.

With $497 billion in liabilities, California had the largest state government debt as of the end of the 2023 fiscal year, the most recent year for which complete data are available.

Four other state governments had more than $200 billion in state debt: New York ($233 billion), Illinois ($223 billion), Texas ($217 billion), and New Jersey ($213 billion). Massachusetts had $120 billion in state liabilities, followed by Connecticut, Washington, Pennsylvania and Florida.

Meanwhile, 10 states—South Dakota, Idaho, Nebraska, Montana, New Hampshire, Utah, Vermont, Rhode Island, Wyoming, and Maine—each had less than $10 billion in debt at the end of 2023, according to Reason Foundation’s State and Local Government Finance Report.

On a per capita basis, Connecticut had the highest state debt, with $26,187 of debt per state resident at the end of 2023. With $22,968 in debt per resident, New Jersey was the only other state with more than $20,000 in liabilities per capita.

Reason Foundation finds 13 states—Connecticut, New Jersey, Hawaii, Delaware, Illinois, Massachusetts, Wyoming, Alaska, North Dakota, California, Washington, New York, and Vermont—had more than $10,000 in debt per resident.

Of other more populous states, Texas had $7,443 in per capita debt, Pennsylvania reported $5,872 per capita, and Florida had $3,334 in debt per capita.

The state governments with the lowest per capita debt at the end of 2023 were Tennessee, Utah, Nebraska, Idaho, South Dakota, Oklahoma, and Indiana, each with less than $3,000 in debt per resident.

Total state debt, reported as total liabilities, includes money state governments owe in the near term, such as unpaid bills and accrued payroll, as well as long-term obligations, including bonds, public pension benefits, and retiree health care benefits.

State governments’ long-term debt

Approximately 72% of state government debt is long-term, meaning it is due in more than one year. This long-term debt consists of bonds, loans, and notes (33%), unfunded public employee pension benefits (35%), unfunded public employee retiree health care benefits (22%), and accrued public employee leave payouts (2%).

State governments collectively reported $1.9 trillion in long-term debt, or approximately $5,800 per capita nationally, as of the end of 2023.

Reason Foundation found 29 states held at least $10 billion in long-term liabilities at the end of 2023.

Six of those states had more than $100 billion in long-term liabilities each: California ($299 billion in long-term debt), Illinois ($199 billion), New Jersey ($197 billion), Texas ($171 billion), New York ($154 billion), and Massachusetts ($104 billion).

Connecticut had the highest per capita long-term debt in the nation, at $23,934 per resident. New Jersey was just behind, with $21,197 in long-term debt per capita.

Hawaii, Illinois, Delaware, and Massachusetts were the other states with long-term debt exceeding $10,000 per capita at the end of 2023.

Of the larger states, New York ranked 12th in per capita long-term debt, with $7,615 per resident. California ranked 13th, with $7,552 per capita long-term debt. Texas was 16th, with $5,870 per capita. Florida ranked 37th in the nation in long-term liabilities, with $2,129 per capita.

Nebraska, Tennessee, Utah, and South Dakota were the only states reporting less than $1,000 per capita long-term debt at the end of 2023.

State public pension debt

Unfunded public employee pension liabilities occur when governments allocate fewer assets than necessary to fulfill the retirement benefits promised to public workers and retirees.

State governments collectively reported $664 billion in unfunded public pension obligations, equivalent to 35% of their long-term debt, or approximately $2,000 per capita nationally, as of the end of 2023.

As of the end of 2023, Illinois had the largest state pension debt, at $145 billion. It was the only state with more than $100 billion in state public pension debt.

California had the second-most state pension debt, $90 billion, which is primarily the state government’s portion of the larger unfunded liabilities held by the California Public Employees’ Retirement System and the California State Teachers’ Retirement System.

Five other state governments reported over $20 billion in pension debt: New Jersey ($80 billion), Texas ($55 billion), Massachusetts ($42 billion), Connecticut ($40 billion), and Kentucky ($29 billion)

On a per capita basis, Illinois again had the most pension debt, with $11,355 per resident. Connecticut was close behind with $11,192 per capita pension debt.

The remaining top 10 states with the highest per capita pension debt were New Jersey, Kentucky, Massachusetts, Alaska, Vermont, Hawaii, New Mexico, and Maryland.

In per capita pension debt, California ranks 14th, at $2,272 per resident; Texas ranks 16th, at $1,870; Florida ranks 41st, at $362; and New York ranks 49th, at $-157.

Three states did not have state pension debt at the end of 2023. Washington, New York, and South Dakota each reported more assets than projected liabilities across public pension systems.

State governments’ outstanding bonded debt

Nationally, state governments reported $630 billion in outstanding bonds, loans, and notes—33% of all state long-term liabilities, Reason Foundation finds. On a per capita basis, the state’s debt from bonds, loans, and notes equals about $1,900 per American.

California has the most outstanding bond debt, with $111.8 billion.

Texas has the second most bond debt, with $67 billion, followed by New York ($50 billion), Massachusetts ($46 billion), Illinois ($30 billion), Connecticut ($29 billion), Washington ($28 billion), New Jersey ($27 billion), Maryland ($22 billion), and Florida ($17 billion).

Two state governments, Indiana and Nebraska, reported zero outstanding bond debt at the end of 2023.

In per capita terms, the state governments of Hawaii and Connecticut rank first and second, respectively, with outstanding bonds of over $8,000 per resident.

Massachusetts, Delaware, and North Dakota follow, all with outstanding bond debt exceeding $4,000 per capita.

California ranked 10th, with $2,828 bond debt per resident. New York ranked 12th, with $2,487 per capita. Texas reported $2,284 in bond debt per resident, the 14th highest in the country, and Florida ranked 39th, with $785 per capita.

Indiana, Nebraska, Wyoming, Montana and Tennessee each reported less than $250 of bonded debt per resident. Indiana and Nebraska reported no outstanding bonds.

All figures in Reason Foundation’s State and Local Government Finance Report are sourced from state governments’ own financial reports, most often their annual comprehensive financial reports. The data in this report is from the 2023 fiscal year, the most recent year for which complete data are available. Nevada has not reported 2023 data. Therefore, the data the state reported for 2022 was used. Despite a thorough review, data collection at this scale can result in discrepancies. Please alert us if you identify any errors.

For personalized reports on municipal entities or more detailed information on assets, liquidity, and solvency, please visit the GovFinance Dashboard.

If you have any questions or would like to discuss this data further, please email Mariana Trujillo at mariana.trujillo@reason.org or Jordan Campbell at jordan.campbell@reason.org.

Related:

Report: State and local governments have $6.1 trillion in debt

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Report: State and local governments have $6.1 trillion in debt

Jordan Campbell — Thu, 23 Oct 2025 04:01:00 +0000

State and local governments had $6.1 trillion in debt at the end of 2023, a new Reason Foundation analysis finds. On a per capita basis, state and local debt amounts to approximately $18,400 per American. This state and local debt is in addition to the $38 trillion national debt.

Of the $6.1 trillion in state and local debt, $2.66 trillion is held by state governments, $1.4 trillion by municipalities, $1.27 trillion by school districts, and $757 billion by counties.

Reason Foundation’s State and Local Government Finance Report finds that $1 trillion is owed by California’s state and local governments, most in the country.

New York’s state and local debt is the second-highest in the nation, at $798 billion, followed by Texas’s $550 billion in state and local debt, Illinois’s $407 billion, New Jersey’s $310 billion, and Florida’s $242 billion.

At the end of 2023, the most recent year for which complete data is available, 48 of the 50 states had at least $10 billion in total debt.

Only Vermont ($8.8 billion) and South Dakota ($5.9 billion) had less than $10 billion in state and local debt.

State and local government debt includes both short- and long-term obligations—from salaries due at the end of this month to bonds maturing decades from now. The $6.1 trillion in liabilities includes $1.5 trillion in public pension obligations, and $958 billion for retiree health care obligations,

In per capita terms, New York’s state and local debt is the highest in the nation. New York’s state government, cities, counties, and school districts hold debt of $39,491 per resident. This is more than double the national average of about $18,400, according to Reason Foundation’s analysis.

In addition to New York, four other states had per capita state and local debt exceeding $30,000 per resident at the end of 2023: Connecticut ($34,592), New Jersey ($33,338), Illinois ($31,783), and Hawaii ($30,399).

Massachusetts, California, Alaska, North Dakota, Delaware, Wyoming, and Maryland also had state and local liabilities of over $20,000 per resident.

Texas ranked next highest, 13th overall, with $18,872 in debt per Texan. Florida ranked 32nd, with $11,217 per person.

State and local debt was lowest in Idaho, Indiana, South Dakota, Tennessee, and Oklahoma, where the liabilities were less than $7,500 per resident at the end of 2023.

State and local government long-term debt

About 80% of state and local debt is long-term, meaning it is due in more than a year. This long-term debt category consists of bonds, loans, and notes (41% of the total), unfunded public pension liabilities (32%), unfunded retiree health care benefits (20%), and accrued leave payouts (2%).

Nationally, state and local governments reported $4.9 trillion in long-term debt at the end of 2023, Reason Foundation’s State and Local Government Finance Report finds. On a per capita basis, long-term debt amounts to approximately $14,700 in state and local debt for every person in the United States.

California, New York, Texas, Illinois, and New Jersey hold the largest long-term debt totals. Together, these five states account for $2.5 trillion, over half of the national total of $4.9 trillion in long-term liabilities.

There are 14 states where long-term state and local debt exceeds $100 billion, and 36 states where it is more than $20 billion.

In per capita terms, New York reported the most state and local long-term debt, at $31,369 per New Yorker, followed closely by New Jersey’s long-term state and local debt of $31,064 per person.

State and local long-term debt exceeds $20,000 per person in Connecticut ($30,998), Illinois ($28,291), Hawaii ($26,271), Massachusetts ($24,520), and California ($20,280).

Texas ranked 10th, with $15,818 per capita in long-term debt, and Florida ranked 30th, with $8,926 per Floridian.

Idaho, South Dakota, Indiana, Oklahoma, and Tennessee have the lowest long-term debt, with each state having less than $5,200 per resident.

State and local government pension debt

Unfunded public employee retirement liabilities, also known as public pension debt, form when governments set aside fewer assets than required to fulfill promised benefits.

Nationally, state and local governments reported $1.5 trillion in pension debt, or 32% of long-term liabilities, at the end of 2023. On a per capita basis, this state and local public pension debt amounts to approximately $4,600 per American.

California carries the most total state and local public pension debt in the nation, with $269 billion in unfunded liabilities.

Illinois ($228 billion in unfunded liabilities) reported the second most public pension debt in the country.

New Jersey ($98 billion in pension debt), Texas ($96 billion), Pennsylvania ($70 billion), New York ($63 billion), and Florida ($62 billion) all had unfunded pension liabilities exceeding $60 billion at the end of 2023.

These top seven states account for more than half of the nation’s state and local pension debt.

In per capita terms, Illinois has the most unfunded pension liabilities: $17,786 per resident.

Connecticut ($12,997) and New Jersey ($10,601) were the two other states with public pension debt exceeding $10,000 per capita.

Massachusetts, Alaska, Kentucky, and Hawaii are the next highest, with each state’s per capita pension debt reaching over $7,000 per person, well above the national average of about $4,600.

California, despite its large aggregate pension burden, ranks only 8th in per capita pension debt, with $6,796 per resident.

Texas ranks 29th in per capita public pension debt, at $3,277 per resident, and Florida ranks 33rd, with $2,868 per resident.

Two states, Washington and South Dakota, reported no public pension debt in 2023.

State and local government OPEB debt

Other post-employment benefits (OPEB) primarily consist of unfunded retiree health care promised to public employees. Unlike pension benefits, most governments have not pre-funded these obligations, leaving other post-employment benefits (OPEB) almost entirely unfunded.

Nationally, state and local governments report $958 billion in OPEB debt, which accounts for 20% of their long-term liabilities. On a per capita basis, OPEB debt equals about $2,900 per American.

New York reports the largest aggregate OPEB debt among its state and local governments in the country. With $303 billion in OPEB debt at the end of 2023, New York is responsible for about one-third of the nation’s aggregate OPEB debt.

California has the second-highest OPEB debt, with over $147 billion, followed by New Jersey ($98 billion) and Texas ($77 billion).

Eleven other states have at least $10 billion in OPEB debt.

In per capita terms, New York again ranks first, with $15,017 in OPEB debt for each New Yorker.

New Jersey follows with $10,599 per capita OPEB debt, Delaware with $8,448 per capita, Connecticut with $6,657, and Massachusetts with $6,308.

California ranks 8th, at $3,712 per resident. Texas ranks 10th, at $2,649, and Florida ranks 29th, at $689.

Alaska, Ohio, Utah, Idaho, and South Dakota report OPEB debt of less than $110 per resident.

State and local outstanding bonded debt

Bonds, loans, and notes represent the portion of state and local liabilities explicitly borrowed in credit markets. Unlike pensions or OPEB, which accumulate as estimated unfunded promises, these instruments are contractual debt obligations with fixed repayment schedules.

Nationally, state and local governments report $2 trillion in outstanding bonds, loans, and notes, which represents 41% of their long-term liabilities. On a per capita basis, this equals $6,100 per resident.

California leads with the largest stock of outstanding bonds and loans, totaling $334 billion across state and local issuers.

Texas owes $287 billion in outstanding bonds and loans, followed by New York ($197 billion), Illinois ($98 billion), and Florida ($81 billion).

Together, these five states account for about half of all outstanding municipal bonds and loans.

The per capita rankings differ significantly. Hawaii owes $14,295 per Hawaiian in bonds and loans.

Connecticut and Massachusetts follow, owing more than $10,000 per resident. Texas, New York, and North Dakota, with more than $9,000 per resident, are next.

Montana, Wyoming, Idaho, and Alabama each have less than $2,000 of bonded debt per resident.

All figures in the State and Local Government Finance Report are sourced from the financial reports of state and local governments, most often their annual comprehensive financial reports. The data is from the 2023 fiscal year, the most recent year for which complete data are available. Nevada and a handful of cities and counties across the country have not reported 2023 data. Therefore, the data reported for 2022 was used. Despite a thorough review, data collection at this scale can result in discrepancies. Please alert us if you identify any errors.

For personalized reports on municipal entities or more detailed information on assets, liquidity, and solvency, please visit the GovFinance Dashboard.

If you have any questions or would like to discuss this data more, please email Mariana Trujillo at mariana.trujillo@reason.org or Jordan Campbell at jordan.campbell@reason.org.

Related:

Report ranks every state’s total debt, from California’s $497 billion to South Dakota’s $2 billion

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Debtor Nation 2025

Jordan Campbell — Thu, 17 Jul 2025 16:00:51 +0000

The size and pace of growth of the national debt are unsustainable. Over the last 12 months, the total public debt outstanding has grown by over $1.5 trillion. With the national debt at over $36 trillion, the United States’ debt-to-Gross Domestic Product (GDP) ratio now exceeds 120%, surpassing the peak reached after World War II.

Interest payments on the national debt are also climbing. In May, Moody’s downgraded the U.S. credit rating from AAA to Aa1.

Still, the political will to address the national debt and federal budget deficits does not exist in meaningful numbers on either side of the political aisle. To get a clearer picture of why the national debt matters to taxpayers and future generations, how we got here, who holds this debt, and what would need to be done to rein it in, Reason Foundation built Debtor Nation.

Why the national debt matters

The national debt is expensive: Debt incurs high interest costs, diverting taxpayer funds from productive uses to pay interest to bondholders.
Debt burdens economic growth: Interest payments on the national debt consume a rising portion of the national budget and gross domestic product (GDP). This borrowing stifles economic growth by absorbing capital from the private sector, making borrowing more expensive for taxpayers and businesses.
Debt imposes unfair costs on future generations: Future taxpayers are on the hook to pay for today’s deficits. They must accept either higher taxes, inflation, or reduced government services.
The debt is becoming unaffordable: The current debt and projected reliance on debt increases the risk of higher borrowing costs, insolvency, and default.

How we got here

The annual U.S. debt-to-GDP ratio reached 120% in 2024, exceeding levels last seen immediately following World War II.
Federal expenditures consistently outpace revenue, driving continued debt growth. Given that federal receipts bounce between 15% and 20% of GDP, spending more than 20% of GDP is simply not sustainable in the long term.
Federal debt growth transcends party lines, driven by major events and policy decisions across presidential administrations and congresses.

Who holds the federal debt?

The federal debt is divided between intragovernmental holdings (primarily the Social Security Trust Fund) and debt held by the public.
Public debt holders include domestic investors, foreign entities, and the Federal Reserve, which has significantly increased its holdings in recent years.
Foreign ownership of U.S. debt represents a substantial portion, raising opportunities and potential economic stability risks.

Where does the federal government spend money?

Mandatory spending, including Social Security and Medicare, accounts for a significant portion of federal outlays, exceeding 65% of total annual expenditures.
Interest payments on the national debt have reached historic levels, creating additional budget pressure.
At $908 billion, defense spending remains the largest discretionary budget item, dwarfing other discretionary spending categories.

Conclusion

You can view the full Debtor Nation data visualization tool here. The tool includes more insights into our national debt, along with a calculator that shows exactly what changes the federal government would need to make to help us climb out of the situation the national debt has put taxpayers and future generations in.

The post Debtor Nation 2025 appeared first on Reason Foundation.

Examining the latest K-12 public school enrollment data and trends

Jordan Campbell — Thu, 26 Jun 2025 14:06:33 +0000

The latest federal data paint a bleak picture of public school enrollment trends.

Research by Stanford University’s Thomas Dee shows declining birth rates, domestic migration, and more families choosing private schools and homeschooling during and after the COVID-19 pandemic school closures are all factors in declining public school enrollment.

However, enrollment trends vary across states. Some major school districts and states saw student numbers drop even before the pandemic. To put the public school enrollment figures into perspective, it is useful to examine state-level and longitudinal data reported by the National Center for Education Statistics (NCES).

Here are five key takeaways from the data and interactive tools to explore other key trends.

1. Public school enrollment has fallen by 1.28 million students since the start of COVID-19.

In the U.S., the COVID-19 pandemic is viewed as starting in February or March 2020. Between the 2020 and 2024 fiscal years (FY), public school enrollment fell by 1.28 million students or 2.5%.

States such as New York, California, Mississippi, and West Virginia all lost more than 5% of their students during that period.

Only nine states saw growth in public school enrollment during that time. In fact, North Dakota is the only state with public school enrollment gains over 2% from the pre-pandemic year.

In comparison, in the four years leading up to the COVID-19 pandemic, public school enrollment increased in 31 states, with sharp increases in North Dakota (6.9% enrollment growth), Idaho (6.4%), Nevada (6.3%), Utah (5.7%), and Washington (5.1%). Chart 1 shows public school enrollment trends between the 2012 and 2024 fiscal years, according to NCES data.

Chart 1: Public school enrollment trends (FY 2012 to FY 2024)

2. The short-term public school enrollment recovery after the pandemic in 2022 and 2023 appears to be over.

In the 2022 and 2023 fiscal years, the nation’s public schools recouped some of their pandemic enrollment losses with slight increases each year over FY 2021 levels, when enrollment was at its post-pandemic low point.

However, the latest National Center for Education Statistics data signals that any hope of further year-over-year enrollment gains might be over. In the 2024 fiscal year, nationwide, public schools lost over 102,000 students compared to the number of students in 2023, with 39 states experiencing a decrease in enrollment, according to NCES data.

The states with the largest public school enrollment declines from 2023 to 2024 included West Virginia (-1.7% enrollment decline), Arkansas (-1.7%), and Wyoming (-1.5%).

Among the 11 states that increased public school enrollment in FY 2024, the states with the largest gains included New Jersey (0.6% enrollment growth), South Carolina (0.6%), and North Dakota (0.4%).

3. Public school enrollment was inching upward before COVID-19.

Before the COVID-19 pandemic, public school enrollment increased by 1.3 million students, or 2.6%, from 2012 to 2020. During this time, the majority of states experienced an increase in public school enrollment, with North Dakota (19%), Utah (14.3%), and Nevada (13%) seeing the most significant increases.

U.S. public school enrollment started to flatten somewhat in the years immediately preceding the COVID-19 pandemic, but 32 states still had an increase in public school students between 2019 and 2020.

4. COVID-19 aggravated existing enrollment loss trends in some states while reversing growth trends in others.

For some states, the pandemic aggravated existing declines in public school enrollment. From the 2012 to 2020 fiscal years, states like New Hampshire (-7.6% drop in enrollment), West Virginia (-6.9%), and Illinois (-6.7%) lost considerable percentages of their public school student populations.

Other states saw the pandemic stop and reverse their enrollment trends. For example, Oregon saw a 7.5% increase in public school enrollment between FY 2012 and FY 2020 but a 6.2% enrollment loss between FY 2020 and FY 2024.

Washington experienced a similar trend, with 9.2% enrollment growth from 2012 to 2020 and a 4.2% enrollment loss during and after the pandemic. Other states like New York (-0.4%), California (-0.6%), and Massachusetts (0.6%) had relatively flat enrollment changes pre-pandemic that turned sharply downward after FY 2020. Chart 2 compares pre-pandemic and post-pandemic trends in public school enrollment, based on NCES data

Chart 2: Changes in each state’s public school enrollment from 2012 to 2024

5. Public school enrollment declines are expected to continue for years.

The National Center for Education Statistics projects that public school enrollment will decline to 46.9 million students by the 2032 fiscal year, representing a 5.3% decrease from 2024.

States such as Hawaii, California, Mississippi, New Mexico, and New York are forecasted to lose over 12% of their public school students during this time, with only 13 states projected to increase the number of students.

Conclusion

Nationwide, public school enrollment has decreased by over one million students since the start of the COVID-19 pandemic. This significant drop reversed the modest growth observed in the years leading up to the pandemic. Local context is essential. Not all states experienced declines after the pandemic, while some states faced enrollment decreases that had started well before the pandemic.

As public schools become increasingly underutilized and school districts face mounting cost pressures, state and local policymakers must adjust to current enrollment and the forecasts of fewer students in the decade ahead. Public school enrollment trends will impact state and local budgets, bond elections, and teacher pension liabilities that policymakers must grapple with.

The post Examining the latest K-12 public school enrollment data and trends appeared first on Reason Foundation.

With additional plans reporting, total unfunded public pension liabilities in the U.S. grow to $1.61 trillion

Jordan Campbell — Tue, 17 Jun 2025 13:00:00 +0000

In the nine months since we released Reason Foundation’s Annual Pension Solvency and Performance Report, we have made several important updates to the tool’s overall structure and added additional data from state and local public pension systems.

The tool has incorporated the data released by public pension systems since our original report was published in September 2024. Public pension systems that ended their fiscal years in June or July of 2024 have been updated. With these additions, the total unfunded public pension liability was $1.61 trillion, up from $1.59 trillion. Correspondingly, the median funded ratio across public pension plans decreased marginally from 76% to 75.8%.

With the additional data, Reason Foundation’s stress-test projections for public pensions have worsened slightly. For example, under a major market shock, defined as a 10% loss, comparable to the Great Recession of 2007-2009, or the temporary stock market decline after President Donald Trump’s ‘Liberation Day’ tariff announcement, unfunded liabilities are now projected to reach $2.29 trillion by 2025, up from our previous estimate of $2.16 trillion.

Total public pension assets were $5.07 trillion, a slight increase from the $5.05 trillion previously reported.

The average assumed rate of return for public pension systems fell marginally from 6.89% to 6.87%, continuing the gradual shift toward more conservative investment expectations amid current economic conditions.

Overall, the updated data reinforces previously identified public pension trends. Insufficient public pension contributions, ongoing asset-liability mismatches, and improving, but still overly optimistic, investment return assumptions are ongoing issues for pension systems.

A significant addition to the tool in this mid-year update is the introduction of the state tracker. While previous versions provided individual state and plan data in separate sections, the state tracker now consolidates all relevant public pension data into a single, easily navigable area. This integration enables direct comparisons of pension funding ratios, investment returns, and liabilities across states within one unified interface.

Structural refinements to enhance clarity and ease of use have also been made. Navigation labels have been streamlined, with sections previously titled “Funding Health & Risk Assessment” simplified to “Funding Health” and “Asset Allocation & Projected Returns” shortened to “Asset Allocation.” These changes aim to improve the user experience, especially those accessing information on mobile devices or smaller screens.

We hope these updates to the Annual Pension Solvency and Performance Report can help inform policy discussions and decisions around pension funding strategies at the local, state and national levels.

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Public school closures were on the upswing in 2024

Jordan Campbell — Mon, 06 Jan 2025 18:47:41 +0000

School closures are becoming a fixture on school board meeting agendas, with places such as Boston, Philadelphia, Seattle, and many others grappling with under-enrolled public schools.

Public schools have lost nearly 1.2 million students since the start of the COVID-19 pandemic, and many school districts need to make the difficult and politically fraught decision to close neighborhood schools.

With declining birth rates, increased homeschooling, and more parents embracing private and charter schools, the National Center for Education Statistics (NCES) projects public schools will lose another 2.7 million students by 2031-32. Enrollment is expected to fall 15% from 2022-23 levels in California and New Mexico, with New York not far behind at nearly 14%, according to NCES.

With fewer students—and less funding—widespread public school closures, while challenging, are necessary and inevitable. However, the most recent federal data from 2021-22 shows that they were down by nearly one-third compared to pre-pandemic levels. There were fewer closures because districts plugged budget holes with the $190 billion in federal COVID-19 relief funding they got during the pandemic. But these federal dollars are expiring, and schools now feel the fiscal impact of losing students.

Without more recent school closure data, policymakers and other stakeholders are in the dark on a critical policy issue.

To shine a light on declining public school enrollment and school closures, Reason Foundation attempted to collect data from all 50 states via public information requests and other public sources. We obtained data from 15 states and excluded charter schools, alternative schools, and programmatic closures from the analysis to get the clearest picture possible of public schools. While our dataset has limitations—including rural states like Idaho and Vermont with relatively few schools to close— it provides much-needed insight into how things are playing out across states, including California, Colorado, Florida, Iowa, New York, Utah, and Virginia.

Our findings indicate that public school closures in these 15 states are on the upswing, with trends varying by state. In the three years before the COVID-19 pandemic (from 2017-18 to 2019-20), total combined school closures in the 15 states examined ranged from 84 to 99 a year. However, in 2020-21, they fell to 69 across the 15 states, and then again to only 65 in 2021-22, a 34% drop-off from 2019-20.

Importantly, total school closures started returning to pre-pandemic levels in 2022-23, with 82 total school closures across the 15 states and continued rising in 2023-24 with 98 closures—almost the same number as 2019-2020.

Chart 1: Public School Closures by School Year (15 States)

At the state level, there were notable increases in school closures in the last two school years. For instance, Colorado jumped from 11 closures in 2022-23 to 26 closures in 2023-24, and South Dakota went from no school closures in 2022-23 to 11 closures in 2023-24, with both states exceeding their pre-pandemic school closure levels by large margins in 2023-24.

Meanwhile, states like New York, Nebraska, and Iowa each returned to pre-pandemic closure levels by 2023-24 after sharp declines during the pandemic.

But California bucked these trends. Before the COVID-19 pandemic, the Golden State had 31 school closures in 2019-20, with closures then falling each year until 2023-24, when it had only seven closures—even fewer than Utah, which had eight.

Chart 2: School Closures by State

All told, total public school closures across the 15 states returned to pre-pandemic levels before federal relief funds expired in September 2025. However, given the magnitude of enrollment drops, many districts seem to be delaying the inevitable, just as experts feared.

This appears to be the case in California, where only a handful of public schools were closed in 2023-24 despite statewide enrollment plummeting by 5.1% between 2019-20 and 2022-23 (the latest federal enrollment data available). An analysis published by The 74 identified more than 1,400 schools in California where enrollment fell by at least 20% during the pandemic, including 125 schools in the Los Angeles Unified School District alone—that’s one in five of the district’s schools.

For many school districts, the recent years with significant federal relief funding was a missed opportunity that could’ve been spent to help smooth the transition for affected students. Now they’ll have to right-size without this budget cushion. But there’s also evidence that districts in some states—such as Colorado—took advantage of the additional dollars, with closures rising in each of the last three school years. This head start should be welcome news, though the trend is likely to continue: between 2019-20 and 2022-23, Colorado’s public schools lost over 42,000 students—about 4.6% of total enrollment.

Public school closures are difficult for communities, but declining enrollment means school boards must make tough decisions. While our 15-state dataset indicates that school closures have risen in the past two years, this is only the start of a difficult road ahead.

There’s much that state policymakers can do to help support this needed transition, but a good first step is requiring state education agencies to publish the most recent data on closed schools. Better yet, they could also publish annual data on under-enrolled public schools, so they know whether school boards are dealing with the problem or just kicking the can down the road. Transparency will be paramount in the coming years.

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Debt trends for state and local governments 2020-2022

Jordan Campbell — Thu, 19 Dec 2024 11:05:00 +0000

Welcome to Reason Foundation’s Government Financial Transparency Project.

This dashboard compiles the key elements of governmental financial statements for fiscal years 2020, 2021, and 2022, covering all 50 states and the top 100 municipalities, counties and school districts.

A historical challenge in comparing the financial health of state and local governments has been that these entities do not prepare their financial statements in a machine-readable format. In some cases, certain reporting entities also fail to adhere to governmental accounting standards generally accepted in the United States.

Reason Foundation has responded to this gap by developing a proprietary automated approach to data extraction of key elements from the financial statements, the results of which are subsequently confirmed by manual human review.

We hope to provide valuable insights for policymakers, journalists, market participants, and other stakeholders by placing their state, municipality, county, or school district in contrast to their peers – and the broader context of the country.

At the end of fiscal 2022, five state governments had more than $200 billion in total liabilities: California, Illinois, New York, New Jersey and Texas.

Massachusetts had over $100 billion in total liabilities, Connecticut and Washington had over $90 billion, and Pennsylvania, Florida and Maryland each had over $60 billion in total liabilities at the end of fiscal 2022.

From the 2020 fiscal year through the 2022 fiscal year, 47 states saw increased revenues. Alaska, Michigan, and Wyoming were the three states that did not increase revenues.

During the same 2020-2022 period, total assets, such as growth in cash, investments, receivables, land, buildings, and infrastructure, increased for all 50 states.

The increase in assets helped 49 states, every state except North Dakota, reduce its state debt ratio, which is defined as the proportion of total liabilities to total assets from fiscal year (FY) 2020 to FY 2022.

At the end of the 2022 fiscal year, the 50 state governments held $1.03 trillion in employee-related debt, including $502 billion in net public pension liabilities and $524 billion in net other post-employment benefit liabilities, such as promised medical benefits for retirees.

For the tool’s full interactivity and options, please visit https://debttrends.transparencyproject.reason.org.

State debt: California, Illinois, New York, New Jersey and Texas each have over $200 billion in total liabilities

County debt: Los Angeles, Philadelphia, Denver, Miami-Dade and Cook counties among worst in nation

City debt: New York has more than four times the liabilities of Chicago, Los Angeles, Houston and other cities

The post Debt trends for state and local governments 2020-2022 appeared first on Reason Foundation.

City debt: New York has more than four times the liabilities of Chicago, Los Angeles, Houston and other cities

Jordan Campbell — Thu, 19 Dec 2024 11:04:00 +0000

Reason Foundation finds that New York City had over $300 billion in total liabilities at the end of 2022, more than four times Chicago’s $74 billion in liabilities and nearly six times Los Angeles’ $51.3 billion.

At the end of fiscal 2022, Houston and the District of Columbia also had over $20 billion in total liabilities.

Reason Foundation finds that New York City’s liabilities reached $34,567 per capita in 2022, the highest in the nation. The next highest per capita liabilities were in the District of Columbia ($29.4k per capita), Chicago ($26.9k per capita), and Atlanta ($21.2k per capita).

At $18,182 per capita, Yonkers, New York, surprisingly had the next highest liabilities, followed by Austin, Texas, with over $16,653 in liabilities per capita.

When looking at cities' public pension systems, New York and Chicago stand out above the rest of the nation. At the end of 2022, New York City had over $42 billion in pension liabilities, and Chicago had over $35 billion.

On a per capita basis, Chicago's public pension liabilities ($12,903 per capita) are well over double New York City's ($4,810 per capita). With $6,553 in pension liabilities per capita, Portland also ranks worse than New York City.

Cincinnati and Pittsburgh had over $3,000 per capita public pension liabilities.

In 2022, governments representing the 100 most populous municipalities across America owed $251.2 billion in employee-related debt, including $126.4 billion in net public pension liabilities and $124.8 billion in net other post-employment benefit liabilities, such as medical benefits promised to retirees.

Ten municipalities—New York, Chicago, Austin, Phoenix, Houston, Portland, Boston, San Jose, Fort Worth, and San Diego—account for 80.1% of the total employee-related debt among the 100 most populous municipalities.

In 2022, New York and Chicago were responsible for 67.3% of the total employee debt held by the country’s 100 largest municipalities.

Several entities in this analysis are cities that have consolidated their operations and financial reporting with the overlapping county. Effectively, these jurisdictions are merged into a single administrative entity. These consolidated governments include Nashville-Davidson (TN), Jacksonville-Duval (FL), San Francisco, Honolulu, Denver, and Philadelphia. Due to their structure and financial reporting practices, these entities cannot be fairly separated into distinct city and county categories. These entities are included in the larger category of counties within this report because their geographic and jurisdictional boundaries match those of the formerly independent counties.

A detailed debt summary for the 100 most populous municipalities from 2020 to 2022 is here: https://debttrends.transparencyproject.reason.org/municipal.

Overview of Government Financial Transparency Project: State and local debt trends 2020-2020

State debt: California, Illinois, New York, New Jersey and Texas each have over $200 billion in total liabilities

County debt: Los Angeles, Philadelphia, Denver, Miami-Dade and Cook counties among worst in nation

City debt: New York has more than four times the liabilities of Chicago, Los Angeles, Houston and other cities

The post City debt: New York has more than four times the liabilities of Chicago, Los Angeles, Houston and other cities appeared first on Reason Foundation.

County debt: Los Angeles, Miami-Dade and Cook counties among worst in nation

Jordan Campbell — Thu, 19 Dec 2024 11:02:00 +0000

Amongst counties, Los Angeles County had the largest liabilities by far: over $54 billion at the end of 2022, Reason Foundation finds.

Other counties with significant liabilities include Miami-Dade County, with $29.2 billion in total liabilities at the end of 2022. Cook County had $19.5 billion in liabilities, Nassau County ($14.2 billion), Harris County ($10.6 billion), and Santa Clara County ($10.2 billion) also had significant liabilities.

When looking at public pension debt in counties, Cook County's $10.8 billion in liabilities was the most in the United States at the end of 2022, followed by Los Angeles County's $7 billion in pension debt.

Miami-Dade County, Santa Clara County, San Diego County, Orange County, and Prince George's County each had more than $2 billion in public pension liabilities at the end of 2022.

At the end of 2022, the governments representing the 100 most populous counties across America owed $448.6 billion in total debt, including an aggregate of $151.2 billion in employee-related benefits debt—$71.3 billion as net public pension liabilities and $79.9 as net other post-employment benefit liabilities, such as medical benefits promised to retirees.

The 10 most indebted counties, in terms of total liabilities, were responsible for more than half (56.5%) of the total liabilities held by the 100 most populous counties.

A detailed debt summary for the most populous counties from 2020 to 2022 is here https://debttrends.transparencyproject.reason.org/county.

Overview of Government Financial Transparency Project: State and local debt trends 2020-2020

State debt: California, Illinois, New York, New Jersey and Texas each have over $200 billion in total liabilities

County debt: Los Angeles, Philadelphia, Denver, Miami-Dade and Cook counties among worst in nation

City debt: New York has more than four times the liabilities of Chicago, Los Angeles, Houston and other cities

The post County debt: Los Angeles, Miami-Dade and Cook counties among worst in nation appeared first on Reason Foundation.

State debt: California, Illinois, New York, New Jersey and Texas each have over $200 billion in total liabilities

Jordan Campbell — Thu, 19 Dec 2024 11:00:00 +0000

Reason Foundation finds California has twice the total liabilities of any other state. California had $498 billion in total liabilities at the end of fiscal year 2022. That’s more than double the $247 billion in total liabilities in Illinois, $245 billion in New York, $225 billion in New Jersey, $221 billion in Texas, and $120 billion in total liabilities in Massachusetts.

On a per capita basis, Reason Foundation finds Connecticut’s total liabilities—$27,031 total liabilities per capita—were the worst in the nation at the end of the 2022 fiscal year, followed by New Jersey ($24.2k in total liabilities per capita), Hawaii ($19.4k per capita), Illinois ($19.4k per capita), and Wyoming ($18.6k per capita).

When looking at state public pension debt, Illinois has nearly double the pension liabilities of any other state. At the end of fiscal 2022, Illinois had $139.8 billion in public pension liabilities, New Jersey had $75.1 billion, California had $54.2 billion, Connecticut had $36.1 billion, Massachusetts had $34.8 billion, and Texas had $30.9 billion.

At the end of 2022, Illinois had $10,915 in pension liabilities per capita, followed by Connecticut ($10k per capita), New Jersey ($8.1k per capita), Kentucky ($5.6k per capita), Massachusetts ($5k per capita), and Hawaii ($4.3k per capita).

At the end of the 2022 fiscal year, the 50 states held $1.03 trillion in employee-related debt, including $502 billion in net public pension liabilities and $524 billion in net other post-employment benefit liabilities, such as promised medical benefits for retirees.

Ten states—Illinois, New Jersey, California, Texas, New York, Connecticut, Massachusetts, Pennsylvania, Kentucky, and Maryland—account for 84.7% of the total employee-related debt among all 50 states.

For detailed information about each state's debt and financial condition, please visit https://debttrends.transparencyproject.reason.org/state.

Overview of Government Financial Transparency Project: State and local debt trends 2020-2020

State debt: California, Illinois, New York, New Jersey and Texas each have over $200 billion in total liabilities

County debt: Los Angeles, Philadelphia, Denver, Miami-Dade and Cook counties among worst in nation

City debt: New York has more than four times the liabilities of Chicago, Los Angeles, Houston and other cities

The post State debt: California, Illinois, New York, New Jersey and Texas each have over $200 billion in total liabilities appeared first on Reason Foundation.

Jordan Campbell, Author at Reason Foundation

Why teacher salaries are stagnant

Teacher salaries before COVID-19

Teacher salaries after COVID-19

Conclusion

State and local governments are drowning in debt

K-12 Education Spending Spotlight 2025: Annual public school spending nears $1 trillion

Total U.S. public school funding is approaching $1 trillion and now exceeds $25,000 per student in eight states.

Policy implications of K-12 funding levels

Public school funding is increasingly spent on employee benefits, including teacher pensions.

Policy implications of rising benefits costs on K-12 spending

Despite plummeting enrollment, the surge in public school staffing has persisted.

Policy implications of decreased public school enrollment and current staff sizes

The average teacher salary has declined significantly since the onset of the COVID-19 pandemic.

Policy implications of teachers’ salaries declining

Student outcomes were falling even before the COVID-19 pandemic, despite record funding levels.

Policy implications of NAEP scores

Conclusion

Report: Cities have $1.4 trillion in debt

City governments’ long-term debt

City government pension debt

City government OPEB debt

City governments’ outstanding bonded debt

Related:

Report: County governments have $757 billion in debt

Long-term debt

County pension debt

Other post-employment benefits debt

Outstanding bonded debt

Related:

Study: Illinois, Connecticut, Alaska, Hawaii, New Jersey and Mississippi have the most per capita pension debt

The public pension plans with the most debt, best and worst investment return rates

Report: State and local pension plans have $1.48 trillion in debt

Unfunded public pension liabilities

Funded ratios of public pensions

Changes in investment strategies

Investment performance

Employer contributions and cash flow

Conclusion

Webinar

Report ranks every state’s debt, from California’s $497 billion to South Dakota’s $2 billion

State governments’ long-term debt

State public pension debt

Other post-employment benefits debt

State governments’ outstanding bonded debt

Report: State and local governments have $6.1 trillion in debt

Report: State and local governments have $6.1 trillion in debt

State and local government long-term debt

State and local government pension debt

State and local government OPEB debt

State and local outstanding bonded debt

Report ranks every state’s total debt, from California’s $497 billion to South Dakota’s $2 billion

Debtor Nation 2025

Why the national debt matters

How we got here

Who holds the federal debt?

Where does the federal government spend money?

Conclusion

Examining the latest K-12 public school enrollment data and trends

1. Public school enrollment has fallen by 1.28 million students since the start of COVID-19.

2. The short-term public school enrollment recovery after the pandemic in 2022 and 2023 appears to be over.

3. Public school enrollment was inching upward before COVID-19.

4. COVID-19 aggravated existing enrollment loss trends in some states while reversing growth trends in others.

5. Public school enrollment declines are expected to continue for years.

Conclusion

With additional plans reporting, total unfunded public pension liabilities in the U.S. grow to $1.61 trillion

Public school closures were on the upswing in 2024

Debt trends for state and local governments 2020-2022

City debt: New York has more than four times the liabilities of Chicago, Los Angeles, Houston and other cities

County debt: Los Angeles, Miami-Dade and Cook counties among worst in nation

State debt: California, Illinois, New York, New Jersey and Texas each have over $200 billion in total liabilities