HALF of all U.S. states going BANKRUPT, financial report finds

A recent report indicates that over half of the U. S. states, specifically 27, ended the fiscal year 2023 with budget deficits, meaning they do not have enough funds to meet their financial obligations. States are currently benefiting from funds received during the COVID-19 pandemic, but these federal funds are expected to run dry by 2026. This will likely force many states to alter their financial management and public service provisions.

During the pandemic, states received over $800 billion in federal support, which allowed them to cut taxes temporarily and increase spending. However, these financial surpluses were short-lived. As states face increasing financial strain, they may need to raise taxes, cut public services, and reduce benefits programs, which is causing concern among the public.

The states that are most financially troubled include Connecticut, New Jersey, Illinois, and Massachusetts, with a high likelihood of tax increases and service cuts impacting residents there. A significant factor contributing to state debt is unfunded retirement liabilities, with a substantial number of state and local government workers having access to pensions, which is less common in the private sector. While pensions are necessary for public workers, they create a financial burden that detracts from funding public projects and infrastructure.

The financial situation is expected to worsen for everyday Americans, leading to increased poverty and other negative outcomes. There is evidence that some people are relocating from high-tax states with financial difficulties to states with lower taxes and more stable finances, such as Alaska and Wyoming.

Currently, about $70 out of every $1,000 in federal aid has been directed toward pension contributions rather than public services. Analysts have pointed out that states are facing declining fiscal flexibility due to changes prompted by COVID-19, where states made tax cuts and increased employee pay for public workers.

The economic outlook for the U. S. appears grim as these financial issues persist.

https://www.naturalnews.com/2024-12-06-report-finds-half-us-states-going-bankrupt.html