About Expected Liability Gap

State and local governments throughout the U.S. purchase bonds for infrastructure improvement and provide pensions and health care for workers. Typically these bonds are paid for by a dedicated revenue stream from local or state finances. Pension obligations are typically funded in an actuarially evaluated fund. However, many states have failed to provide a direct funding stream to bond obligations or fully fund pension plans. This leads to unfunded bond and pension liabilities. These unfunded liabilities represent an expected state fiscal liability gap, which is a good indicator of the direction of future taxes and public services.

To measure the expected fiscal liability gap, we include data on unfunded liability per capita and percentage of GDP, average benefits, and bond rankings.

Sources: Boston College Center for Retirement Research, U.S. Department of the Census 2012 Statistical Abstract, and Bureau of Economic Analysis.

2019 Expected Liability Gap

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Table

State	Grade
Alabama	C
Alaska	D
Arizona	C-
Arkansas	C
California	D-
Colorado	C
Connecticut	F
Delaware	B
Florida	B
Georgia	A
Hawaii	D
Idaho	B
Illinois	F
Indiana	C+
Iowa	B-
Kansas	D
Kentucky	F
Louisiana	C
Maine	C
Maryland	C+
Massachusetts	C
Michigan	C-
Minnesota	C+
Mississippi	D
Missouri	B
Montana	F
Nebraska	A
Nevada	C-
New Hampshire	C-
New Jersey	F
New Mexico	D+
New York	C
North Carolina	A
North Dakota	C-
Ohio	C
Oklahoma	C+
Oregon	C
Pennsylvania	D-
Rhode Island	D
South Carolina	C
South Dakota	A
Tennessee	B
Texas	B+
Utah	A
Utah	A
Vermont	C-
Virginia	B-
Washington	B
West Virginia	D
Wisconsin	B+
Wyoming	C

Center for Business and Economic Research - Ball State University

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2019 Expected Liability Gap