Press Release

New Report Reveals Growing State Bonded Debt Burdens

Alexis Jarrett

New Report Reveals Growing State Bonded Debt Burdens  

Total state bonded obligations have grown by nearly $100 billion in one year as governments continue borrowing

ARLINGTON, VA – (JULY 20, 2021) Today, the American Legislative Exchange Council (ALEC) releases State Bonded Obligations, 2020. The report finds state governments’ bonded obligations exceed $1.25 trillion nationwide – an average of $3,800 per person. This annual publication from the ALEC Center for State Fiscal Reform analyzes each state’s level of debt and features policy solutions to address the root of state debt problems: government spending.

In evaluating each state’s bonded obligations, the report authors analyzed the types of bonds issued, debt payment schedules and total liability. This comparative analysis across the states offers important insights into state approaches to managing obligations. The report serves to bring needed educational awareness for government debt and spending decisions that could result in future generations being saddled with higher taxes.

“Indiana has a constitutional debt limit, one of the strictest in the country,” said Indiana State Senator Jim Buck. “This puts us in a good place, especially compared to our neighbors in Illinois who have no debt limit and often use bonds to cover tax revenue shortfalls. I’m proud of how Indiana has prioritized fiscal responsibility on behalf of taxpayers.”

This publication uses total bonded obligations per capita to illustrate the magnitude of the debt:

Best 5 States Ranked (per capita)

  • Wyoming: $67
  • Indiana: $200
  • Nebraska: $667
  • Montana: $1,059
  • Missouri: 1,086


Worst 5 States Ranked (per capita)

  • Connecticut: $12,055
  • Alaska: $11,095
  • Hawaii: $10,948
  • Rhode Island: $10,135
  • Massachusetts: $8,615


“Many states are continuing to use bonds to increase government spending and pass the buck to future generations of taxpayers,” said ALEC Chief Economist and Executive Vice President of Policy Jonathan Williams. “But even in the near term, states that neglect to reform their budgeting practices will eventually see taxpayers leave for states with less burdensome tax and fiscal policies. Fortunately, states like Indiana and Nebraska have constitutional amendments to keep debt limits relatively low and provide valuable lessons for policymakers in states suffering from significant debt burdens.”

Follow this link to read the full report.

The ALEC Center for State Fiscal Reform strives to educate decision makers and the general public on the principles of sound fiscal policy and the evidence that supports those principles. This is done by personalized research, policy briefings in the states and by releasing nonpartisan policy publications for distribution.


The American Legislative Exchange Council is the largest nonpartisan, voluntary membership organization of state legislators in the United States. The Council is governed by state legislators who comprise the Board of Directors and is advised by the Private Enterprise Advisory Council, a group of private, foundation and think tank members. For more information about the American Legislative Exchange Council, please visit:

Related Content

  • State Bonded Obligations, 2020

    State governments borrow for a myriad of reasons and issue various types of bonded obligations. Today, their total bonded liabilities exceed $1.25 trillion, representing just over $3,800 per person nationally.