States With the Most Debt Per Person (2026 Rankings)
Zach Hill · February 28, 2026
Last Updated: February 2026
When Americans think about government debt, the $40+ trillion national debt dominates the conversation. But state governments collectively owe trillions more — and the burden varies wildly depending on where you live.
A resident of Connecticut faces a state debt burden roughly ten times higher per person than a resident of Nebraska. The difference is driven primarily by pension obligations, bond issuance, and how aggressively states have promised benefits to public employees without fully funding them.
This guide ranks all 50 states by total debt per capita — including bonded debt, unfunded pension liabilities, and other post-employment benefit (OPEB) obligations — and explains the patterns behind the numbers. For live data on any specific state, visit our interactive state debt dashboard.
Methodology: What Counts as "State Debt"?
State debt can be measured in several ways, and the ranking changes significantly depending on which definition you use:
- Bonded debt only: Outstanding general obligation and revenue bonds. This is the narrowest measure and the one most often cited by state treasurers
- Bonded debt + unfunded pensions: Adds the gap between what pension funds have and what they owe. This is a more comprehensive measure
- Total burden (bonds + pensions + OPEB): The most comprehensive measure, including retiree healthcare obligations. This is what we use for our primary ranking
Our rankings use the total burden measure because it captures all long-term obligations that taxpayers will ultimately need to fund. Data is drawn from state comprehensive annual financial reports (CAFRs), pension fund actuarial valuations, and the U.S. Census Bureau's Annual Survey of State Government Finances.
Top 10 States With the Highest Debt Per Capita
These ten states carry the heaviest per-person debt burden in the nation. Pension obligations are the dominant factor in nearly every case.
| Rank | State | Total Debt Per Capita | Pension Funded Ratio | S&P Credit Rating |
|---|---|---|---|---|
| 1 | Connecticut | $51,700 | ~52% | A+ |
| 2 | New Jersey | $38,900 | ~55% | A- |
| 3 | Illinois | $35,400 | ~42% | BBB+ |
| 4 | Massachusetts | $29,100 | ~62% | AA |
| 5 | New York | $25,300 | ~93% | AA+ |
| 6 | Hawaii | $23,800 | ~58% | AA |
| 7 | Kentucky | $21,600 | ~47% | A- |
| 8 | Alaska | $20,400 | ~68% | AA |
| 9 | Rhode Island | $19,200 | ~56% | AA- |
| 10 | California | $13,400 | ~72% | AA- |
Sources: State CAFRs, pension fund actuarial reports, S&P Global Ratings. Figures are estimates based on most recent available data as of early 2026.
Key Patterns in the Top 10
- Northeastern dominance: Seven of the top ten most-indebted states per capita are in the Northeast. These states tend to have older pension systems, stronger public employee unions, and more generous benefit structures
- Pension funding is the primary driver: Connecticut (#1), New Jersey (#2), and Illinois (#3) all have pension funded ratios below 55%. States with low funded ratios carry enormous unfunded liabilities that inflate per-capita debt
- Credit ratings lag: Illinois (BBB+) and New Jersey (A-) have the lowest credit ratings among states, reflecting persistent fiscal stress. Connecticut (A+) has improved from its low point but remains below investment-grade elite
- Small population amplifies per-capita figures: Alaska, Hawaii, and Rhode Island have relatively small populations, which makes their per-capita figures look worse even when total debt is modest in absolute terms
Bottom 10 States With the Lowest Debt Per Capita
These states carry the lightest debt burden per person. They tend to have well-funded pensions, conservative borrowing practices, and — in many cases — smaller government footprints.
| Rank | State | Total Debt Per Capita | Pension Funded Ratio | S&P Credit Rating |
|---|---|---|---|---|
| 41 | Idaho | $3,800 | ~95% | AAA |
| 42 | Iowa | $3,600 | ~87% | AAA |
| 43 | Tennessee | $3,300 | ~95% | AAA |
| 44 | Florida | $4,100 | ~82% | AAA |
| 45 | Indiana | $3,100 | ~81% | AAA |
| 46 | Utah | $2,900 | ~96% | AAA |
| 47 | South Dakota | $2,700 | ~100% | AAA |
| 48 | Wyoming | $2,400 | ~78% | AA+ |
| 49 | Nebraska | $2,200 | ~91% | AAA |
| 50 | North Dakota | $1,800 | ~72% | AA+ |
Key Patterns in the Bottom 10
- Midwestern and Western states dominate: Eight of the ten least-indebted states are in the Midwest or Mountain West, regions with traditions of fiscal conservatism and balanced-budget discipline
- Well-funded pensions: Most of these states have pension funded ratios above 80%, with several near or at full funding. South Dakota stands out with a near-100% funded ratio
- AAA credit ratings are the norm: Seven of the ten hold the highest possible credit rating, reflecting strong fiscal management
- Florida is the notable outlier: As the third-most-populous state, Florida manages to keep per-capita debt remarkably low despite significant infrastructure needs. Its no-income-tax model, combined with strong tourism revenue and population growth, has supported a fiscally conservative approach
Complete 50-State Ranking
The following table provides the full ranking of all 50 states by total debt per capita, including bonded debt, unfunded pension liabilities, and OPEB obligations.
| Rank | State | Debt Per Capita | Pension Funded % |
|---|---|---|---|
| 1 | Connecticut | $51,700 | 52% |
| 2 | New Jersey | $38,900 | 55% |
| 3 | Illinois | $35,400 | 42% |
| 4 | Massachusetts | $29,100 | 62% |
| 5 | New York | $25,300 | 93% |
| 6 | Hawaii | $23,800 | 58% |
| 7 | Kentucky | $21,600 | 47% |
| 8 | Alaska | $20,400 | 68% |
| 9 | Rhode Island | $19,200 | 56% |
| 10 | California | $13,400 | 72% |
| 11 | Vermont | $13,100 | 61% |
| 12 | Mississippi | $12,900 | 59% |
| 13 | Pennsylvania | $12,700 | 64% |
| 14 | South Carolina | $12,500 | 57% |
| 15 | New Mexico | $11,800 | 65% |
| 16 | Oregon | $11,600 | 75% |
| 17 | West Virginia | $11,200 | 69% |
| 18 | Michigan | $10,900 | 66% |
| 19 | Louisiana | $10,600 | 64% |
| 20 | Maryland | $10,300 | 72% |
| 21 | Colorado | $10,100 | 68% |
| 22 | Delaware | $9,800 | 86% |
| 23 | Washington | $9,500 | 80% |
| 24 | Maine | $9,300 | 72% |
| 25 | Nevada | $9,000 | 76% |
| 26 | Minnesota | $8,800 | 79% |
| 27 | Alabama | $8,500 | 70% |
| 28 | Arizona | $8,400 | 73% |
| 29 | Texas | $8,200 | 78% |
| 30 | New Hampshire | $8,000 | 65% |
| 31 | Montana | $7,800 | 73% |
| 32 | Virginia | $7,600 | 80% |
| 33 | Ohio | $7,300 | 76% |
| 34 | Wisconsin | $7,000 | 98% |
| 35 | Georgia | $6,800 | 78% |
| 36 | Missouri | $6,500 | 80% |
| 37 | Oklahoma | $6,200 | 72% |
| 38 | Kansas | $5,900 | 71% |
| 39 | Arkansas | $5,600 | 78% |
| 40 | North Carolina | $4,500 | 88% |
| 41 | Idaho | $3,800 | 95% |
| 42 | Iowa | $3,600 | 87% |
| 43 | Tennessee | $3,300 | 95% |
| 44 | Florida | $4,100 | 82% |
| 45 | Indiana | $3,100 | 81% |
| 46 | Utah | $2,900 | 96% |
| 47 | South Dakota | $2,700 | 100% |
| 48 | Wyoming | $2,400 | 78% |
| 49 | Nebraska | $2,200 | 91% |
| 50 | North Dakota | $1,800 | 72% |
Sources: State comprehensive annual financial reports, pension actuarial valuations, U.S. Census Bureau. Rankings are estimates based on the most recent publicly available data as of early 2026. For live state-level data, visit our state debt tracker.
Regional Patterns in State Debt
The 50-state ranking reveals stark regional patterns that reflect differences in governance philosophy, unionization rates, and pension history.
Northeast: The Pension Belt
The Northeast carries the heaviest per-capita debt loads in the nation. States like Connecticut, New Jersey, Massachusetts, and New York have older, more generous pension systems established when public-sector unionization was at its peak. Many of these states also have high costs of living, which pushes up salary-linked pension obligations.
The region's saving grace is its wealth. High incomes and property values generate substantial tax revenue, which is why even heavily indebted states like New York and Massachusetts maintain strong credit ratings.
Midwest: A Mixed Bag
The Midwest is split. Illinois has one of the worst fiscal profiles in the nation, with the lowest credit rating of any state and pension systems funded at barely 42%. Wisconsin, by contrast, has one of the best-funded pension systems in the country (98% funded) thanks to a unique risk-sharing design that adjusts benefits based on investment performance.
Other Midwestern states like Indiana, Iowa, and Nebraska have kept debt low through conservative borrowing and well-managed pension funds.
South: Growing but Borrowing
Southern states generally carry moderate debt loads. Fast-growing states like Texas, Georgia, and North Carolina have expanding economies and populations that help dilute per-capita debt. However, some southern states — particularly Kentucky, Mississippi, and South Carolina — struggle with underfunded pensions and lower credit ratings.
West: The California Effect
The West is defined by the California outlier. California carries the largest absolute debt of any state but sits in the middle of the pack per capita. Most other Western states — Idaho, Utah, Wyoming, Montana — are among the least indebted in the nation, with strong credit ratings and well-funded pensions.
Oregon is an exception, with its PERS (Public Employees Retirement System) creating a meaningful pension overhang.
Pension Funding: The Hidden Crisis
If there is one lesson from these rankings, it is that pension funding ratios are the single most important predictor of state fiscal health. States with pension funded ratios below 60% — Connecticut, New Jersey, Illinois, Kentucky — dominate the high-debt end of the rankings. States with ratios above 90% — South Dakota, Wisconsin, Utah, Tennessee, Idaho — are clustered at the bottom.
The reason is simple arithmetic. A pension system that is 50% funded has promised $2 for every $1 it currently has invested. That gap must be closed through higher taxpayer contributions, benefit cuts, or some combination — and it compounds over time as retirees collect benefits that the fund cannot fully support.
What Is a "Good" Funded Ratio?
- 90-100%: Fully or nearly fully funded. The gold standard
- 80-89%: Healthy. Minor adjustments needed
- 70-79%: Concerning but manageable. Most states fall here
- 60-69%: Significant stress. Higher contributions needed
- Below 60%: Crisis territory. Structural reform likely required
Credit Ratings: What the Market Thinks
Credit rating agencies evaluate states based on their debt levels, revenue diversity, economic health, governance quality, and pension funding. Here is how the distribution looks across all 50 states:
| Rating Tier | Number of States | Examples |
|---|---|---|
| AAA (Highest) | 15 | Texas, Florida, Utah, Georgia, North Carolina |
| AA+ to AA- | 25 | New York, California, Ohio, Oregon, Arizona |
| A+ to A- | 8 | Connecticut, New Jersey, Kentucky, Louisiana |
| BBB+ or lower | 2 | Illinois (BBB+), [no state below BBB] |
No state has ever defaulted on its general obligation bonds in the modern era, and all 50 states maintain investment-grade ratings. But the spread between a AAA-rated state like Texas and a BBB+-rated state like Illinois means real dollars: Illinois pays significantly higher interest rates to borrow, which compounds its fiscal challenges over time.
How State Debt Connects to the National Debt
State and local debt totals roughly $3.2 trillion across all 50 states — a significant sum, though dwarfed by the $40+ trillion federal national debt. However, state and local obligations are important because:
- No federal backstop: Unlike the federal government, states cannot print money or rely on the Federal Reserve as a lender of last resort
- Services at risk: State debt payments directly compete with funding for schools, roads, police, and healthcare
- Taxpayer overlap: The same taxpayers who bear federal debt burdens also bear state and local debt burdens — the combined load matters
- Potential federal bailouts: If a state pension crisis becomes severe enough, political pressure for a federal bailout could add to the national debt
For a deeper understanding of how federal debt works, see our guides on understanding the national debt and the debt-to-GDP ratio.
Frequently Asked Questions
Which state has the most total debt?
In absolute terms, California has the most total debt at approximately $522 billion (including unfunded pensions and OPEB). However, per capita, Connecticut ranks first at roughly $51,700 per person. The "most indebted" state depends on which metric you prioritize.
Which state has the least debt?
North Dakota has the lowest debt per capita at approximately $1,800. In absolute terms, Wyoming and Vermont have among the smallest total debt loads, though their small populations mean per-capita figures are not always the lowest.
Why do northeastern states have so much debt?
Northeastern states established large public pension systems in the mid-20th century, when strong public-sector unions negotiated generous benefits. Many of these systems were underfunded for decades, and the resulting unfunded liabilities now dominate state balance sheets. Higher costs of living also push up salary-linked obligations.
Does a state's credit rating predict its debt level?
There is a strong correlation but not a perfect one. States with very high debt per capita (Connecticut, New Jersey, Illinois) tend to have lower credit ratings. But states like New York and Massachusetts maintain strong ratings despite high debt because their economies and tax bases are large and resilient enough to service those obligations. Learn more in our glossary of debt terms.
Can states go bankrupt?
No. Under current federal law, states cannot file for Chapter 9 bankruptcy — that protection is reserved for municipalities (cities, counties, special districts). States have sovereign immunity and broad taxing authority, which makes outright default extremely unlikely, though not technically impossible.