Truong Bui, Author at Reason Foundation

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

Truong Bui — 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

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Best practices in cash balance plan design

Truong Bui — Thu, 28 Aug 2025 04:01:00 +0000

Executive summary

The “Gold Standard in Public Retirement System Design Series” reviews the best practices of public pensions and provides a design framework for states struggling under the burden of post-employment benefit debt. This entry in the Gold Standard series examines cash balance plans, which have experienced a recent uptick in adoption over the past few years. This brief examines best practices for implementing a successful cash balance plan, as well as exploring the offerings of cash balance pension plans across the country.

This analysis, “Best practices in cash balance plan design,” reveals that the stability and adequacy of cash balance plans are critically determined by specific design choices. The interest crediting formula, in particular, emerges as the central driver of employer risk. While fixed or market-based crediting methods produce funding volatility nearly identical to that of traditional defined benefit plans, this research demonstrates that conditional formulas—such as those tied to funded status or featuring capped market returns—can meaningfully reduce volatility while still supporting sufficient retirement income.

Effective plan design must also be paired with robust funding policies. In most scenarios, contribution rates between 12% and 20% of pay can achieve full funding and ensure adequate benefits, provided they are coupled with conservative return assumptions and disciplined amortization methods. Open or overly long amortization periods can erode plan solvency even when the underlying benefit structures are designed to be more predictable.

Overly aggressive assumptions in asset smoothing, payroll growth assumptions, and plan maturity can mask funding shortfalls and create compounding deficits. These factors, while often overlooked, prove to be as consequential as the benefit formula itself in determining a system’s long-term risk exposure.

A transition to a cash balance structure offers an opportunity to reset actuarial assumptions, enforce strict funding discipline, and improve stakeholder transparency. This modeling concludes that cash balance plans, when constructed with conditional mechanisms and strong funding rules, offer a stable and sustainable framework for public retirement systems.

Introduction

The continued underfunding of U.S. pension systems has put an enormous strain on state and local governments. To combat this, many plan sponsors have begun to look at alternative designs for their retirement systems. One of those designs is the cash balance plan, a type of retirement plan that blends features of traditional defined benefit pensions with elements of defined contribution (DC) plans, offering a notional employer contribution, a guaranteed interest credit, and improved portability for employees.

Until 2012, there were only four public cash balance plans nationwide. There are now eight such cash balance plans, with two of those being adopted since 2020.

Cash balance plans are positioned as an option that meets the needs of plan sponsors who wish to pare down their risk exposure, while still offering their employees a low-maintenance, guaranteed benefit. For a mobile workforce that tends not to spend their entire careers in government employment, especially in the era of teleworking, cash balance plan portability—on par with defined contribution retirement plans—is attractive. When an employee leaves their employment, for whatever reason, a cash balance plan allows the employee to take the entirety of their contributions, as well as their employer’s, plus the interest gained on those contributions.

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

Truong Bui — 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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Mississippi adopts hybrid retirement design in major pension reform

Truong Bui — Fri, 28 Mar 2025 19:07:58 +0000

After years of unfunded liability accrual and growing legislative solvency concerns, the Mississippi Legislature passed a major pension reform bill to provide a new “hybrid” retirement plan for future state and local public employees and teachers. The reform package included in House Bill 1 (HB1) will slow the growth of liabilities in the Public Employees’ Retirement System of Mississippi (PERS) and expand the portability of benefits for future workers.

Coming on the heels of contribution rate changes enacted by the legislature in 2024, the move will add another critical guardrail in officials’ attempt to put PERS—only 56% funded with $26.5 billion in unfunded pension liabilities—on a path to solvency. However, despite the positive changes, poor market conditions still threaten to bankrupt the PERS pension trust fund. Additional reforms will be necessary for the 2026 legislative session.

The legislature began to tackle the PERS unfunded liability challenge in earnest for the first time in 2024 by enacting a new schedule of incremental increases that required employers to slowly contribute more to PERS over time, along with a one-time supplemental appropriation of $110 million of state surplus funds. These “Phase 1” moves were a good start but did not fundamentally alter the financial trajectory of PERS in a significant way. The legislature prudently opted to call for a new retirement benefit tier (known as “Tier 5”) for the 2025 legislative session, which manifested initially in Senate Bill 2339, then became embedded in the final version of House Bill 1, pairing pension reform with a major tax reform that will lower rates significantly.

The pension reform provisions contained within House Bill 1 will offer all new hires on or after March 1, 2026, a new hybrid retirement plan that combines a defined benefit component like previous tiers with a defined contribution component for added mobility:

New members can retire at age 62 with at least eight years of membership service. Alternatively, they can retire at any age with at least 35 years of creditable service.
New members are immediately vested in the defined contribution plan.
All members will continue to contribute 9% of their earned compensation. For new members, 4% will be allocated to the defined benefit plan, and the remaining 5% will be directed to the member’s defined contribution account.
Employer contributions will be applied to the system’s accrued liability contribution fund.
The annual retirement allowance will include a member’s annuity equal to 1% of the average compensation for each year of creditable service.
For new members, “average compensation” is defined as the average of the eight highest consecutive years of earned compensation or the last 96 consecutive months of earned compensation, whichever is greater.

The Pension Integrity Project at Reason Foundation provided technical assistance to many stakeholders throughout the reform process, including the bill sponsors, legislative leadership in the House and Senate, and many individual legislators. We provided independent actuarial modeling during the process and advised legislative leadership and staff on design concepts.

The new Mississippi PERS Tier 5 hybrid retirement plan is similar to the reform designs enacted by several other governments, all of which have been successful in driving pension sustainability and have been fairly popular with employees:

The United States moved to a hybrid retirement design for federal workers in 1987 under President Ronald Reagan after Congress passed the Federal Employees’ Retirement System Act of 1986, which blended the Federal Employee Retirement System, defined benefit with the Thrift Savings Plan, defined contribution into one combined benefit. The Thrift Savings Plan’s annual member satisfaction survey in 2024 found that 84% of federal workers were satisfied with their plan.
All United States Uniformed Services (Department of Defense, United States Coast Guard, National Oceanic and Atmospheric Administration, and United States Public Health Service) moved to a hybrid military retirement plan called the Blended Retirement System, BRS, beginning in 2018. As of January 1, 2024, over 1.3 million members were enrolled in BRS, representing 68% of active members and 46% of Reserve and National Guard personnel.
The hybrid plan design option has also been the most popular alternative to traditional pensions among state governments that have enacted major plan design reforms, with states like Tennessee, Georgia, Virginia, Pennsylvania, Washington, Oregon, Utah, and Rhode Island all transitioning one or more legacy pension designs to a hybrid approach.

The pension reform in HB1, combined with modest funding improvements enacted in 2024, represents two strong initial phases of reform critical to turning around decades of declining financial health in Mississippi PERS. However, a third (and potentially more) phases of reform remain critical targets for legislative action in 2026, as outlined in the recommendations section below.

How Mississippi got here

At the turn of the century, the Mississippi Public Employee Retirement System, PERS, faced a funding gap of $2.3 billion, with 87.5% of its obligations covered. Since then, the situation has deteriorated significantly, largely due to investment returns falling short of overly optimistic forecasts and a gradual reduction in those expectations to more realistic levels. As a result, PERS now carries an unfunded liability, or pension debt, exceeding $25 billion.

Figure 1 breaks down the contributors to the pension debt, which include underperforming investments ($5.7 billion) and revised investment assumptions ($7.0 billion). Additionally, negative amortization—when contributions in a given year fail to cover that year’s interest on existing debt—has increased the shortfall by another $4.9 billion. The system’s cost-of-living adjustment (COLA), a fixed 3% annual increase, does not align with actual inflation and has grown to consume a larger share of payouts, further straining finances. Expected salary increases for employees that were never actually granted have slightly reduced the total unfunded liability.

Beyond these financial challenges, structural funding issues persist. As of 2025, PERS is in a tenuous position with costs that are extremely vulnerable to volatility in global investment markets. PERS actuaries have warned that contributions from employers–even at the increased 19.9% rate–are insufficient to pay off debt and fully fund promised pension benefits. According to system estimates, employers would need to contribute an amount equal to 22.4% of payroll to achieve full funding within 30 years. Maintaining the current insufficient statutory contribution rate will result in much slower and likely stagnant progress in eliminating the state’s pension debt, with tens of billions in debt remaining and accruing expensive interest over 50 or more years.

These projected outcomes are far worse if market returns are much lower than plan assumptions, which policymakers must account for. The ultimate cost of the pension system will grow significantly (adding over $13 billion) over the next 30 years if markets return the 6% average expected by market watchers. If the economy and pension system encounter two recessions over the next 30 years (Figure 2), the system is projected to run out of funding, which would force the state into a pay-as-you-go (paygo) funding policy, meaning benefits would need to be paid without the benefit of accrued investment savings. If PERS were to face insolvency, contributions from employers would need to rise above 49% of compensation (well above the current 22.4% requirement), costing taxpayers more than $27 billion in additional contributions over the next 30 years to pay for pension promises.

Explaining the reform

The new PERS tier (“Tier 5”) established in HB1 is a crucial step for Mississippi’s retirement system if it is ever going to recover from decades of underfunding. It reforms the system by enrolling all new hires into a hybrid plan and adjusting some of the other benefits associated with the pension, effectively slowing the growth of liabilities attached to public workers going forward.

Instead of using all of their 9% contribution for a pension benefit, new hires enrolled in the hybrid Tier 5 benefit will see the same rate split between a pension and a defined contribution (DC) plan. Tier 5 employees will see 4% of their paycheck used to fund the pension portion, and 5% go toward an individual 401(a) account. PERS employers will continue to contribute the statutorily required amount equal to 19.9% of the total payroll, which will still be used to pay for the system’s unfunded liabilities.

The pension portion of the Tier 5 hybrid will secure a guaranteed lifetime benefit about half the size of Tier 4 (using a 1% multiplier in the benefit calculation instead of 2%). The calculation’s final average salary (FAS) portion will also use a member’s eight highest-paid years rather than the current four-year average used in Tier 4. The DC portion will give employees a more flexible benefit that will require no vesting period, be less vulnerable to inflation with returns accruing throughout employment and retirement, and be more portable to other jobs and retirement plans.

Tier 5 also adjusts some of the retirement eligibility requirements for the pension portion of the hybrid. Instead of eligibility beginning at age 60 or at 25 years of service, the pension portion of the new hybrid will be available at age 62 after 30 years of service or age 65 (eight years served minimum) or at any age after 35 years of service.

A final major change for new public hires in Mississippi will be that there will no longer be a guaranteed 3% COLA to insulate pension benefits from inflation. It will be possible for the legislature to grant benefit adjustments on a discretionary basis through legislative action, but COLAs will not be included in the liability and cost projections for Tier 5. While this aspect of HB1 will help mitigate future costs and risks, it also represents a significant shift in benefits offered to new hires, as discussed further below.

Analysis of HB1’s reforms

Mississippi’s pension reform aims to bend the PERS liability curve downward by slowing the growth of pension benefit accruals, making it somewhat easier for funding to catch up eventually. Actuarial modeling prepared by the Pension Integrity Project at Reason Foundation indicates that HB1 will likely achieve this goal if actuarial assumptions such as investment return and payroll growth prove accurate.

Because the Tier 5 hybrid plan reallocates retirement benefits from a defined benefit that serves a fraction of members to a defined contribution benefit (which cannot accrue a liability and cannot create unexpected costs), the growth of liabilities is expected to slow. Additionally, suspending costly COLA benefits for new hires has reduced the impact on the accrual of PERS benefits going forward.

Reason modeling of PERS shows a distinct long-term impact (Figure 3). Applying the new Tier 5 reform will ultimately reduce liability accrual by more than $80 billion by 2074.

This slowing of liability accrual gives Mississippi a better chance of achieving full funding. Reason modeling shows that the new benefit and funding structure could bring PERS to full funding at least a full decade sooner if market outcomes match plan expectations (Figure 4). This would have a significant impact on the overall costs for government employers and taxpayers.

Reduced liabilities and the much-improved trajectory of PERS funding will likely generate significant savings over the long run. Looking at both projected unfunded liabilities and all employer contributions to the plan, this reform is projected to save $6.5 billion over the next 30 years and over $17 billion over the next 50 years. Importantly, the risk-reducing features of the reform go a long way in managing these costs under less-than-ideal market scenarios. According to Reason’s modeling, this reform would save more than $30 billion if PERS were to experience multiple recessions and returns below the current 7% expectation over the next 50 years.

Mississippi policymakers should be warned that, while this reform does reduce long-term costs, it is not projected to reduce the chances of PERS becoming insolvent and exhausting all assets. Figure 5 shows the projected funded ratio of the reformed system, both under a scenario of 7% annual returns and one that involves two recessions and returns below expectations (6%). Comparing these outcomes to the pre-reformed system (Figure 2), a less-than-ideal investment outcome still results in plummeting and eventual exhaustion of funding. HB1 has not eliminated the danger of insolvency facing PERS, which must be addressed in future reforms.

Assessing the Tier 5 benefit

Another advantage to Mississippi’s Tier 5 reform is that it will offer a retirement benefit that better reflects the evolving needs of new hires today. Pensions tend to reward lifetime employees or those who stick around their entire career. This type of employee is increasingly rare in both the private and public sectors. According to Reason’s analysis, PERS expects most new hires to have left by year five, years before the pension’s steep eight-year vesting requirement. That means the current pension offers little to most of the state’s new workers.

Retirement plans must adapt to meet the needs of today’s employees. Hybrid plans balance risk between employers and employees while offering more flexibility than traditional pensions. Employers benefit from reduced financial exposure, while employees—who often change jobs before qualifying for a full pension—gain some portability and access to market-driven growth. Unlike Tier 4, which requires workers to leave their contributions in the plan with minimal interest or withdraw them—often forfeiting employer contributions—a hybrid plan allows employees to take the defined contribution (DC) portion with them when they move to a new job.

New employees will enjoy more than just the benefits of modernized flexibility in the Tier 5 hybrid. The DC element of the hybrid is expected to improve retirement benefit outcomes for most new hires. Figure 6 compares the estimated value of the PERS DB plan, the new Tier 5 hybrid, and a pure DC plan. To compare the value of one plan type to another, the analysis calculates the amount that could be generated in annual annuity payments (meaning guaranteed lifetime benefits) for someone hired at age 32 at increasing years of service.

The analysis shows that the new Tier 5 benefit actually outpaces the retirement value generated by the state’s pension until year 30, at which point the pension provides a slight advantage. Keeping in mind that very few newly hired members (less than 10%) stay in their position for 30 years, it is clear that the HB1 Tier 5 hybrid actually provides a greater benefit for the vast majority of PERS members.

This analysis also includes the accrued annual lifetime benefits that an employee could earn from a pure DC plan with 9% employee and 5% employer contributions. The advantages of a DC plan of this type would further improve the retirement offerings to public workers. Mississippi policymakers should consider granting a full DC plan as an option to new hires.

A pure DC option could also address one of the primary concerns expressed about the Tier 5 hybrid. Since no COLA benefit will be provided for the DB portion of the hybrid, new public employee hires will see part of their retirement reduced over time from year-to-year inflation. The DC element of the hybrid will grow with market returns, providing at least some cushion from the loss of COLA benefits. Still, having no COLA will represent a significant recalibration of expectations from legacy to new hires in Mississippi. To further alleviate this concern, lawmakers should give employees the ability to select a full DC plan instead of the new hybrid, which would eliminate any concerns about managing a fixed lifetime benefit with no protection from inflation

Completing the reform to prevent MSPERS insolvency — framing a 2026 policy agenda

The new Tier 5 benefit design included in HB1 is a necessary and critical step in addressing the state’s growing pension challenges. The new Tier 5 plan design alone will not solve the PERS underfunding crisis, however, and state lawmakers need to continue to seek an additional Phase 3 of reforms in 2026 to avoid insolvency and secure PERS for future generations.

Recommendation 1: Fix the broken PERS’ funding policy

Pension Integrity Project modeling of PERS indicates that while the hybrid plan for new hires will improve the system’s trajectory, the system will remain at risk of insolvency under recession scenarios. The main culprit threatening the state’s pension funding will continue to be its rigid contribution policy with rates set in statute rather than adjusting each year to achieve a payoff goal. The current approach represents a failed pension funding policy, as it:

Is the primary reason PERS remains underfunded today and is structurally underfunding PERS every single year;
Has no relation to actuarial calculations nor is it set to achieve full funding;
Pretends that 19.9% has some objective meaning other than being the rate policymakers today would prefer to pay into the PERS system; and
Sacrifices long-term funding needs for year-to-year cost stability.

Looking to the next legislative session, policymakers should pursue reforms to establish a more reflexive annual contribution that will avoid the long-standing systematic underfunding issues that have thrust the state into the current pension debt quagmire. Using an actuarially determined employer contribution (ADEC) is considered the gold standard policy for responsibly funding pension benefits. Still, there are many incremental steps in between that would improve the state’s current statutory approach. Any effort to accelerate the growth of the system’s assets–for example, a supplementary contribution or any type of contribution increase–will not only better secure PERS, but it will also end up saving taxpayers tremendous amounts of money by avoiding decades of expensive interest on the burdensome pension debt.

Recommendation 2: Adopt an optional defined contribution (DC) retirement plan

The new hybrid plan is a notable step toward meeting the flexibility needs of the modern workforce, but state policymakers missed out on a major opportunity to make PERS more valuable to a broader set of potential new hires.

With the creation of individual 401(a) plans for the DC side of the hybrid in Tier 5, it would be easy for PERS to now offer a full DC retirement plan option for those who want to take advantage of this type of retirement plan. Offering an option to have all contributions go to a DC plan would expand the system’s ability to serve more unique employee situations and would do so while actually reducing the risk of runaway costs even more than the new hybrid approach. Several state-run retirement plans have enjoyed success in offering a full DC option, and Mississippi’s lawmakers should prioritize this in the 2026 session.

Conclusion

Through several years of study and coalition building, and with the assistance of the Pension Integrity Project, Mississippi policymakers have enacted a reform that will greatly improve the long-term viability of its retirement plan for public workers. The reformed Tier 5 benefit for new public employee hires will establish a more balanced and risk-managed plan that works better for most employees and the taxpayers who fund the system in the end. The reform is a clear, positive step in improving the system’s long-term solvency and will improve the chances of achieving crucial long-term funding goals. However, it should be clear to policymakers that the work in Mississippi is not done, as PERS remains very much at risk in the face of a volatile and unpredictable future.

To complete the state’s path toward a comprehensive reform, lawmakers must next address longstanding funding issues with changes to the annual contribution policy. They should also set up an optional DC plan for public employees, improving the retirement benefits for most of those beginning employment. These steps would better secure PERS for future generations and reduce expensive debts that have created massive unexpected costs for Mississippi taxpayers.

Additional resources

Full Explainer: Does the hybrid plan established in HB1 meet the objectives for good pension reform?

Does the hybrid plan established in HB1 meet the objectives for good pension reform?.">Does the hybrid plan established in HB1 meet the objectives for good pension reform?Download

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Alabama Ranks 17th in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Alabama’s highway system ranks 17th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is a two-spot worsening from Alabama’s ranking of 15th overall in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Alabama’s highways rank 29th in urban Interstate pavement condition, 33rd in rural Interstate pavement condition, 1st in urban arterial pavement condition, 4th in rural arterial pavement condition, 8th in structurally deficient bridges, 29th in urban fatality rate, and 33rd in rural fatality rate.

Alabama ranks 17th out of the 50 states in traffic congestion, and its drivers spend 13 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Alabama ranks 22nd in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones.

Alabama ranks 1st in maintenance spending, such as the costs of repaving roads and filling in potholes. Alabama’s administrative disbursements, including office spending that doesn’t make its way to roads, ranks 42nd nationwide.

The categories in which the state improved the most from the previous report were urban fatality rate (from 38th to 29th) and urban Interstate pavement (from 36th to 29th).

Alabama worsened the most in the other disbursements (from 22nd to 46th).

Compared to neighboring and nearby states, Alabama’s overall highway performance is better than Mississippi’s (18th) and Arkansas’ (28th) but worse than South Carolina’s (2nd), Georgia’s (6th), and Florida’s (14th).

Comparing its overall performance to similarly populated states, Alabama ranks behind Kentucky (11th) but ahead of Louisiana (46th).

Alabama’s highway system ranks 17th out of 50 states overall this year, ranked 15th in last year’s report, and was 10th in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, Alabama should focus on reducing administrative disbursements and other disbursements. These are the only categories in which the state ranks in the bottom 10,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “Reducing the number of traffic fatalities on urban and rural roads should also be a priority for Alabama.”

Reason Foundation’s 28th Annual Highway Report measures the condition and cost-effectiveness of state-controlled highways in 13 categories, including pavement and bridge conditions, traffic fatalities, and spending. In the performance categories, ranking first implies the state has the best or lowest fatality rate and its road pavement is in the best condition. A ranking of 50th in performance categories means the state has the worst fatality rates or pavement conditions. In simplified terms, in the cost-effectiveness categories, a rank of 50 means the state spends more money, and a first-place ranking means the state spends less money than other states in that category.

The report’s data are primarily information each state directly reported to the Federal Highway Administration for 2022. Better Roads and Bridges provides the deficient bridge data, and the Texas A&M Transportation Institute provides the traffic congestion data.
Please see the complete 28th Annual Highway Report for detailed methodology and a comprehensive list of data sources.

28th Annual Highway Report

Complete Report PDF
Complete State-by-State Summaries PDF

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Alaska Ranks 50th in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Alaska’s highway system ranks 50th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, Alaska also ranked 50th in the nation in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Alaska’s highways rank 8th in urban Interstate pavement condition, 48th in rural Interstate pavement condition, 19th in urban arterial pavement condition, 50th in rural arterial pavement condition, 35th in structurally deficient bridges, 49th in urban fatality rate, and 48th in rural fatality rate.

Alaska ranks 13th out of the 50 states in traffic congestion, and its drivers spend 10 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Alaska ranks 48th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Alaska ranks 40th in maintenance spending, such as the costs of repaving roads and filling in potholes. Alaska’s administrative disbursements, including office spending that doesn’t make its way to roads, ranks 21st nationwide.

The categories in which the state improved the most from the previous report were in maintenance disbursements (47th to 40th) and administrative disbursements (27th to 21st).

Alaska worsened the most in the urban arterial pavement condition category (9th to 19th).

Compared to other somewhat similar states, Alaska’s overall highway performance is worse than Wyoming’s (12th), Idaho’s (15th), Montana’s (16th), Oregon’s (35th), Washington’s (47th), and Hawaii’s (48th).

Comparing its overall performance to similarly populated states, Alaska ranks behind both North Dakota (3rd) and Vermont (44th).

Alaska’s highway system ranks 50th out of 50 states overall this year, ranked 50th in last year’s report, and was 49th in the nation five years ago in 2019.

“Alaska has unique weather and location challenges but can do better. In terms of improving in the road condition and performance categories, Alaska should focus on improving rural Interstate pavement condition and rural arterial pavement condition. Alaska ranks in the bottom three of all the states in these two categories,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “The number of traffic deaths are among the worst in the nation, so reducing the number of traffic fatalities on urban and rural roads should also be a top priority for Alaska.”

28th Annual Highway Report

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Arizona Ranks 29th in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Arizona’s highway system ranks 29th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is a one-spot improvement from Arizona’s ranking of 28th in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Arizona’s highways rank 12th in urban Interstate pavement condition, 41st in rural Interstate pavement condition, 20th in urban arterial pavement condition, 30th in rural arterial pavement condition, 1st in structurally deficient bridges, 38th in urban fatality rate, and 45th in rural fatality rate.

Arizona ranks 30th out of the 50 states in traffic congestion, and its drivers spend 23 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Arizona ranks 27th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Arizona ranks 7th in maintenance spending, such as the costs of repaving roads and filling in potholes. Arizona’s administrative disbursements, including office spending that doesn’t make its way to roads, ranks 41st nationwide.

The categories in which the state improved the most from the previous report were in capital-bridge disbursements (46th to 27th) and other disbursements (44th to 30th).

Arizona worsened the most in the other fatality rate (18th to 41st).

Compared to neighboring and nearby states, Arizona’s overall highway performance is worse than Utah’s (8th), but better than New Mexico’s (38th) and Colorado’s (43rd).

Comparing its overall performance to similarly populated states, Arizona ranks behind Tennessee (5th) but ahead of Washington (47th).

Arizona’s highway system ranks 29th out of 50 states overall this year, ranked 30th in last year’s report, and was 29th in the nation five years ago in 2019.

“In terms of improving in the road condition and performance categories, Arizona should focus on improving its administrative disbursements per mile, rural Interstate pavement condition, rural fatality rate, and other fatality rate. Arizona ranks in the bottom 10 of all the states in each of these categories,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “Arizona should also prioritize reducing the number of traffic fatalities on urban and rural roads.”

28th Annual Highway Report

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Arkansas Ranks 28th in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Arkansas’ highway system ranks 28th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is a 15-spot worsening from Arkansas’ ranking of 13th overall in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Arkansas’ highways rank 40th in urban Interstate pavement condition, 39th in rural Interstate pavement condition, 30th in urban arterial pavement condition, 36th in rural arterial pavement condition, 23rd in structurally deficient bridges, 46th in urban fatality rate, and 43rd in rural fatality rate.

Arkansas ranks 4th out of the 50 states in traffic congestion, and its drivers spend about seven hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Arkansas ranks 25th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones.

Arkansas ranks 6th in maintenance spending, such as the costs of repaving roads and filling potholes. Arkansas’ administrative disbursements, including office spending that doesn’t make its way to roads, ranks 3rd nationwide.

The category in which the state improved the most from the previous report was urbanized area congestion (from 25th to 4th).

Arkansas worsened the most in urban fatality rate (from 7th to 46th).

Compared to neighboring and nearby states, Arkansas’ overall highway performance is better than Oklahoma’s (39th) and Louisiana’s (46th) but worse than Tennessee’s (5th).

Comparing its overall performance to similarly populated states, Arkansas ranks behind Kansas (22nd) but ahead of Iowa (31st).

Arkansas’ highway system ranks 28th out of 50 states overall this year, ranked 13th in last year’s report, and ranked 32nd in the nation five years ago in 2019.

“In terms of improving the road condition and performance categories, Arkansas should focus on improving urban Interstate pavement conditions, given it is Arkansas’ lowest performance-focused ranking,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “Arkansas should also make it a priority to reduce the number of deaths on its urban and rural roads, given its fatality rates are some of the worst in the nation.”

28th Annual Highway Report

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California Ranks 49th in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

California’s highway system ranks 49th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is a two-spot fall from California’s ranking of 47th overall in

the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, California’s highways rank 47th in urban Interstate pavement condition, 46th in rural Interstate pavement condition, 50th in urban arterial pavement condition, 41st in rural arterial pavement condition, 25th in structurally deficient bridges, 33rd in urban fatality rate, and 28th in rural fatality rate.

California ranks 44th out of the 50 states in traffic congestion, and its drivers spend 60 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, California ranks 43rd in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. California ranks 44th in maintenance spending, such as the costs of repaving roads and filling in potholes. California’s administrative disbursements, including office spending that doesn’t make its way to roads, ranks 35th nationwide.

The category in which the state improved the most from the previous report was rural fatality rate (39th to 28th).

California worsened the most in urban fatalities (23rd to 33rd).

Compared to neighboring and nearby states, California’s overall highway performance is worse than Nevada’s (24th), Arizona’s (29th), Oregon’s (35th), and Washington’s (47th).

Comparing its overall performance to similarly populated states, California ranks behind Florida (14th) and Texas (25th).

California’s highway system ranks 49th out of 50 states overall this year, ranked 47th in last year’s report, and was 43rd in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, California should focus on improving urban and rural Interstate pavement quality, improving both rural and urban principal arterial pavement quality, reducing maintenance and capital-bridge disbursements, and improving urbanized area congestion. The state ranks in the bottom 10 states for each of these performance-based categories,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. It also ranks in the bottom 10 for other fatality rate, which is another weakness.

28th Annual Highway Report

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Colorado Ranks 43rd in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Colorado’s highway system ranks 43rd in the nation in overall cost- effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is consistent with the ranking of 43rd that Colorado had in the

last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Colorado’s highways rank 45th in urban Interstate pavement condition, 47th in rural Interstate pavement condition, 35th in urban arterial pavement condition, 37th in rural arterial pavement condition, 19th in structurally deficient bridges, 40th in urban fatality rate, and 32nd in rural fatality rate.

Colorado ranks 36th out of the 50 states in traffic congestion, and its drivers spend 36 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Colorado ranks 42nd in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Colorado ranks 45th in maintenance spending, such as the costs of repaving roads and filling in potholes. Colorado administrative disbursements, including office spending that doesn’t make its way to roads, ranks 26th nationwide.

The category in which the state improved the most from the previous report was administrative disbursements (from 40th to 26th).

Colorado worsened the most in capital-bridge disbursements (28th to 42nd).

Compared to neighboring and nearby states, Colorado’s highway performance is worse than Utah’s (8th), Wyoming’s (12th), Kansas’ (22nd), Arizona’s (29th), Nebraska’s (30th), and New Mexico’s (38th).

Comparing its overall performance to similarly populated states, Colorado ranks behind Minnesota (7th) and Wisconsin (26th).

Colorado’s highway system ranks 43rd out of the 50 states overall this year, ranked 43rd in last year’s report, and was 36th in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, Colorado should focus on reducing capital and bridge disbursements and maintenance disbursements as well as improving both rural and urban Interstate conditions,” said Baruch Feigenbaum, lead author of the 28thAnnual Highway Report and senior managing director of transportation policy at Reason Foundation. “The state should also focus on lowering its urban fatality rate, its lowest safety-focused category ranking.”

28th Annual Highway Report

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Connecticut Ranks 13th in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Connecticut’s highway system ranks 13th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is an eight-spot fall from Connecticut’s ranking of 5th overall in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Connecticut’s highways rank 15th in urban Interstate pavement condition, 9th in rural Interstate pavement condition, 28th in urban arterial pavement condition, 32nd in rural arterial pavement condition, 21st in structurally deficient bridges, 26th in urban fatality rate, and 30th in rural fatality rate.

Connecticut’s ranks 32nd out of the 50 states in traffic congestion, and its drivers spend 29 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Connecticut ranks 18th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Connecticut ranks 9th in maintenance spending, such as the costs of repaving roads and filling in potholes. Connecticut administrative disbursements, including office spending that doesn’t make its way to roads, rank 14th nationwide.

The categories in which the state improved the most were urbanized area congestion (42nd to 32nd) and maintenance disbursements (16th to 9th).

Connecticut worsened the most in urban fatality rate (11th to 26th).

Compared to neighboring and nearby states, Connecticut’s rank is higher than New Hampshire’s (19th), Massachusetts’ (40th), Rhode Island’s (42nd), and New York’s (45th).

Comparing its overall performance to similarly populated states, Connecticut ranks behind Utah (8th) but higher than Iowa (31st), Oregon (35th), and Oklahoma (39th).

Connecticut’s highway system ranked 13th overall this year, 5th overall last year, and 44th in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, Connecticut should focus on improving rural arterial pavement conditions and urbanized area congestion. These are the only performance-focused categories in which the state ranks in the bottom 20,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “Connecticut should also look to lower its rural fatality rate, which was the state’s lowest safety-focused ranking.”

28th Annual Highway Report

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Delaware Ranks 41st in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Delaware’s highway system ranks 41st in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is a six-spot fall from Delaware’s ranking of 35th overall in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Delaware’s highways rank 46th in urban Interstate pavement condition, 16th in urban arterial pavement condition, 21st in rural arterial pavement condition, 4th in structurally deficient bridges, 36th in urban fatality rate, and 49th in rural fatality rate. Delaware does not have any rural Interstate mileage.

Delaware ranks 48th out of the 50 states in traffic congestion, and its drivers spend 83 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Delaware’s ranks 4th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Delaware ranks 46th in maintenance spending, such as the costs of repaving roads and filling in potholes. Delaware’s administrative disbursements, including office spending that doesn’t make its way to roads, ranks 48th nationwide.

The categories in which the state improved the most from the previous report were other disbursements (25th to 10th) and urban fatality rate (43rd to 36th).

Delaware worsened the most in other fatality rate (25th to 38th).

Compared to neighboring and nearby states, Delaware’s overall highway performance is worse than Virginia’s (4th), Maryland’s (32nd), New Jersey’s (34th) and Pennsylvania’s (37th).

Comparing its overall performance to similarly populated states, Delaware ranks ahead of Rhode Island (42nd) but behind South Dakota (27th).

Delaware’s highway system ranks 41st out of 50 states overall this year, ranked 35th in last year’s report, and was 42nd in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, Delaware should focus on lowering both maintenance and administrative disbursements, as well as reducing traffic congestion, as there are three categories in which the state ranks in the bottom five,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “Reducing the urban, rural, and other fatality rates should also be a priority as the state ranks in the bottom 15 of all states for all three metrics.”

28th Annual Highway Report

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Florida Ranks 14th in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Florida’s highway system ranks 14th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is a six-spot fall from Florida’s ranking of 8th overall in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Florida’s highways rank 9th in urban Interstate pavement condition, 4th in rural Interstate pavement condition, 5th in urban arterial pavement condition, 5th in rural arterial pavement condition, 10th in structurally deficient bridges, 48th in urban fatality rate, and 38th in rural fatality rate.

Florida ranks 39th out of the 50 states in traffic congestion, and its drivers spend 45 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Florida ranks 40th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Florida ranks 25th in maintenance spending, such as the costs of repaving roads and filling in potholes. Florida’s administrative disbursements, including office spending that doesn’t make its way to roads, ranks 23rd nationwide.

The categories in which the state improved the most were rural fatality rate (45th to 38th) and administrative disbursements (28th to 23rd).

Florida worsened the most in urbanized area congestion (18th to 39th).

Compared to neighboring and nearby states, Florida’s overall highway performance is better than Alabama’s (17th) and Mississippi’s (18th) but worse than South Carolina’s (2nd) and Georgia’s (6th).

Comparing its overall performance to similarly populated states, Florida ranks ahead of Texas (25th) and New York (45th).

Florida’s highway system ranks 14th out of 50 states overall this year, ranked 8th in last year’s report, and was 40th in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, Florida should focus on reducing capital-bridge disbursements and reducing traffic congestion. These are the only performance categories in which the state ranks in the bottom 25 states,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “The state should also look to lower its urban fatality rate. Florida’s rank of 48th in urban fatality rate makes it one of the worst in the nation for this safety metric.”

28th Annual Highway Report

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Hawaii Ranks 48th in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Hawaii’s highway system ranks 48th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is consistent with the ranking Hawaii had in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Hawaii’s highways rank 50th in urban Interstate pavement condition, 40th in urban arterial pavement condition, 47th in rural arterial pavement condition, 26th in structurally deficient bridges, 47th in urban fatality rate, and 50th in rural fatality rate. Hawaii does not have any rural Interstate mileage.

Hawaii ranks 19th out of the 50 states in traffic congestion, and its drivers spend 15 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Hawaii ranks 20th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Hawaii ranks 8th in maintenance spending, such as the costs of repaving roads and filling in potholes. Hawaii’s administrative disbursements, including office spending that doesn’t make its way to roads, ranks 25th nationwide.

The categories in which the state improved the most from the previous report were maintenance disbursements (20th to 8th), urbanized area congestion (26th to 19th), and structurally deficient bridges (33rd to 26th).

Hawaii worsened the most in urban fatality rate (39th to 47th).

Compared to neighboring and nearby states, Hawaii’s overall highway performance is better than California’s (49th) and Alaska’s (50th) but worse than Oregon’s (35th) and Washington’s (47th).

Comparing its overall performance to similarly populated states, Hawaii ranks behind New Hampshire (19th), and West Virginia (33rd).

Hawaii’s highway system ranks 48th out of 50 states overall this year, ranked 48th in last year’s report, and was 47th in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, Hawaii should focus on improving urban Interstate pavement conditions and both rural and urban arterial pavement conditions. The state ranks in the bottom 12 for each of those categories,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “Reducing the number of traffic fatalities on urban and rural roads should also be a priority for Hawaii. The state has some of the worst fatality rates in the country.”

28th Annual Highway Report

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Georgia Ranks 6th in the Nation in Highway Performance and Cost-Effectiveness

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Georgia’s highway system ranks 6th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is a two-spot worsening from Georgia’s ranking of 4th overall in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Georgia’s highways rank 13th in urban Interstate pavement condition, 14th in rural Interstate pavement condition, 3rd in urban arterial pavement condition, 2nd in rural arterial pavement condition, 5th in structurally deficient bridges, 39th in urban fatality rate, and 25th in rural fatality rate.

Georgia ranks 43rd out of the 50 states in traffic congestion, and its drivers spend 54 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Georgia ranks 8th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Georgia ranks 15th in maintenance spending, such as the costs of repaving roads and filling in potholes. Georgia’s administrative disbursements, including office spending that doesn’t make its way to roads, ranks 32nd nationwide.

The categories in which the state improved the most from the previous report were rural fatality rate (from 35th to 25th) and rural arterial pavement condition (8th to 2nd).

Georgia worsened the most in other disbursements (7th to 22nd).

Compared to neighboring and nearby states, Georgia’s overall highway performance is better than Alabama’s (17th) and Mississippi’s (18th) but worse than South Carolina’s (2nd) and Tennessee’s (5th).

Comparing its overall performance to similarly populated states, Georgia ranks ahead of Ohio (10th) but behind North Carolina (1st).

Georgia’s highway system ranks 6th out of 50 states overall this year, ranked 4th in last year’s report, and was 26th in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, Georgia should look at improving its urbanized area congestion, the only category where the state ranks in the bottom 10,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “Reducing the urban fatality rate, which is the only safety category the state ranks in the bottom 15, should also be a priority for Georgia.”

28th Annual Highway Report

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Illinois Ranks 36th in the Nation in Cost-Effectiveness and Condition

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Illinois’ highway system ranks 36th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is a seven-spot worsening from Illinois’ ranking of 29th overall in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Illinois’ highways rank 37th in urban Interstate pavement condition, 29th in rural Interstate pavement condition, 34th in urban arterial pavement condition, 42nd in rural arterial pavement condition, 38th in structurally deficient bridges, 21st in urban fatality rate, and 16th in rural fatality rate.

Illinois ranks 46th out of the 50 states in traffic congestion, and its drivers spend 65 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Illinois ranks 45th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Illinois ranks 24th in maintenance spending, such as the costs of repaving roads and filling in potholes. Illinois’ administrative disbursements, including office spending that doesn’t make its way to roads, ranks 30th nationwide.

The categories in which the state improved the most from the previous report were urban fatality rate (from 26th to 21st) and maintenance disbursements (27th to 24th).

Illinois worsened the most in administrative disbursements (11th to 30th).

Compared to neighboring and nearby states, Illinois’ overall highway performance is worse than Missouri’s (9th), Kentucky’s (11th), Mississippi’s (18th), Indiana’s (20th), Wisconsin’s (26th), Arkansas’ (28th), and Iowa’s (31st).

Comparing its overall performance to similarly populated states, Illinois ranks behind Ohio (10th) but ahead of Pennsylvania (37th).

Illinois’ highway system ranks 36th out of 50 states overall this year, ranked 29th in last year’s report, and was 28th in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, Illinois should focus on reducing capital-bridge disbursements, rural arterial pavement condition, and urbanized congestion. These are the only categories in which the state ranks in the bottom 10,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “Additionally, Illinois should prioritize reducing the percent of structurally deficient bridges in the state. The state’s worst performing safety category is bridges.”

28th Annual Highway Report

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Idaho Ranks 15th in the Nation in Cost-Effectiveness and Condition

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Idaho’s highway system ranks 15th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is a 19-spot improvement from Idaho’s ranking of 34th overall in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Idaho’s highways rank 7th in urban Interstate pavement condition, 23rd in rural Interstate pavement condition, 12th in urban arterial pavement condition, 12th in rural arterial pavement condition, 20th in structurally deficient bridges, 5th in urban fatality rate, and 23rd in rural fatality rate.

Idaho ranks 7th out of the 50 states in traffic congestion, and its drivers spend seven hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Idaho ranks 49th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Idaho ranks 33rd in maintenance spending, such as the costs of repaving roads and filling in potholes. Idaho’s administrative disbursements, including office spending that doesn’t make its way to roads, ranks 17th nationwide.

The categories in which the state improved the most from the previous report were rural arterial pavement condition (46th to 12th) and urban arterial pavement condition (34th to 12th).

Idaho worsened the most in the other disbursements (from 32nd to 40th).

Compared to neighboring and nearby states, Idaho’s overall highway performance is better than Montana’s (18th), Nevada’s (24th), Oregon’s (35th), and Washington’s (47th) but worse than Utah’s (8th).

Comparing its overall performance to similarly populated states, Idaho ranks higher than Nebraska (30th) and West Virginia (33rd).

Idaho’s highway system ranks 15th out of 50 states overall this year, ranked 34th in last year’s report, and was 13th in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, Idaho should focus on reducing capital-bridge disbursements and other disbursements. These two categories are Idaho’s worst rankings overall,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “Additionally, Idaho should look for ways to lower its rural fatality rate, in which it ranks 23rd, the state’s lowest safety-focused ranking.”

28th Annual Highway Report

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Indiana Ranks 20th in the Nation in Cost-Effectiveness and Condition

Truong Bui — Thu, 13 Mar 2025 04:01:00 +0000

Indiana’s highway system ranks 20th in the nation in overall cost-effectiveness and condition.

According to the Annual Highway Report by Reason Foundation, this is a three-spot improvement from Indiana’s ranking of 23rd overall in the last evaluation of the condition, safety, and costs of roads and bridges in all 50 states.

In safety and condition categories, Indiana’s highways rank 22nd in urban Interstate pavement condition, 34th in rural Interstate pavement condition, 4th in urban arterial pavement condition, 3rd in rural arterial pavement condition, 24th in structurally deficient bridges, 45th in urban fatality rate, and 14th in rural fatality rate.

Indiana ranks 28th out of the 50 states in traffic congestion, and its drivers spend 22 hours a year stuck in traffic congestion.

In spending and cost-effectiveness, Indiana ranks 46th in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. Indiana ranks 49th in maintenance spending, such as the costs of repaving roads and filling in potholes. Indiana’s administrative disbursements, including office spending that doesn’t make its way to roads, ranks 16th nationwide.

The categories in which the state improved the most from the previous report were rural fatality rate (37th to 14th) and urban arterial pavement condition (18th to 4th).

Indiana worsened the most in the urban fatality rate (24th to 45th).

Compared to neighboring and nearby states, Indiana’s overall highway performance is better than Illinois’ (36th) and Michigan’s (23rd) but worse than Ohio’s (10th) and Kentucky’s (11th).

Comparing its overall performance to similarly populated states, Indiana ranks behind Missouri (9th) but ahead of Massachusetts (40th).

Indiana’s highway system ranks 20th out of 50 states overall this year, ranked 23rd in last year’s report, and was 33rd in the nation five years ago, in 2019.

“In terms of improving in the road condition and performance categories, Indiana should focus on reducing capital-bridge and maintenance disbursements. These are the only categories in which the state ranks in the bottom five and make up the worst rankings for the state overall,” said Baruch Feigenbaum, lead author of the 28th Annual Highway Report and senior managing director of transportation policy at Reason Foundation. “Reducing the number of traffic fatalities on urban roads should also be a priority for Indiana.”

28th Annual Highway Report

Complete Report PDF
Complete State-by-State Summaries PDF

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