Heart of the River hosts Protest Paddle


By Lesley Weidenbener

Indiana's state government is carrying the

country's third lowest amount of debt per capita, according to an analysis

released Thursday.

The state has $5,970 of debt for each of its 6.5 million residents

– significantly less than the national average of $13,754 – said

State Budget Solutions, a nonpartisan think tank that aligns with conservative

organizations and describes itself as "pro-reform."

In all, Indiana state government is carrying roughly $38.7 billion

in debt, according to the report. That number includes not only bonds issued

for projects but also loans taken by the state's unemployment trust fund and

future, under-funded pension liabilities.

"It's not accidental that our debt numbers are relatively good,"

said State Budget Director Adam Horst. "We've taken a deliberative approach.

Some of it is because Indiana has not been borrowing money to support its

operating budget. And some of it is because we haven't been building new


The study also ranked states on their debt relative to the private

sector labor force and private sector output. Indiana ranked among the Top 5

states in those categories as well.

John Ketzenberger, president of the Indiana Fiscal Policy

Institute, said Hoosiers should view the analysis as good news.

"In the context of what we hear all the time about the federal

government and the debt liabilities for the federal government, people get the

notion that we're all up to our eyeballs in debt," Ketzenberger said. "This

shows Indiana – on a relative basis – is doing pretty good and has

managed to pretty much pay its way as it goes."

State Budget Solutions President Bob Williams said Gov.

Mitch Daniels and the Indiana General Assembly should be credited with passing and

managing budgets in a way that make the state less dependent on borrowing.

"It's a good state," Williams said Thursday. "Your governor has

stopped the budget gimmicks and made other good budgeting decisions that show

up in your lower debt."

Two of Indiana's neighbors – Illinois and Ohio –

ranked among the highest debt states. Williams said that will only benefit

Indiana as businesses and individuals look to escape places where higher taxes

might be necessary to pay off high debt.

Williams said the goal of the analysis was to reveal the relative

burden of states' debts, rather than simply looking at debt totals.

The study found that several states ranked among the bottom in

multiple categories, meaning they scored the worst. Those states included

Alaska, New Jersey, Hawaii, Connecticut, New Mexico, and Illinois.

Alaska had the nation's highest per-capita debt at $39,373 per


Nebraska ranked first in all three debt categories, meaning it was

carrying the least relative debt. State Budget Solutions found it had debt of

just $4,274 per resident.

States with lower debt have lower debt payments, which frees up

cash for other priorities, Horst said. It also helps states achieve higher

credit ratings.

"Because our debt numbers are going down, we're not committing

future administrations to financial obligations," Horst said. "And indirectly

it means that we have a higher credit rating and that we can borrow money

cheaper when we do borrow."

Most of Indiana's debt is in three areas: Bonds for construction

projects at universities, mental hospitals, prisons, state parks and other

facilities; older bonds for highway construction; and the unemployment

insurance loans from the federal government.

Indiana currently owes $1.9 billion that it borrowed from federal

officials when the taxes paid by businesses failed to keep up with payments to

unemployed Hoosiers. The General Assembly has revamped that system so the state

will pay that money back over the next decade.

Williams said the state could also take steps to reduce its debt

by shoring up underfunded pension liabilities.

Total state debt per capita rankings

Best 5 States

Nebraska ($4,274)

Tennessee ($5,553)

Indiana ($5,970)

Florida ($7,401)

Idaho ($7,625)

Worst 5 States

Alaska ($39,373)

New Jersey ($32,023)

Connecticut ($27,909)

Hawaii ($26,693)

Illinois ($21,869)

North Dakota ($19,403)

Total state debt per private sector worker rankings

Best 5 States

Nebraska ($9,787)

Tennessee ($15,861)

Indiana ($16,208)

South Dakota ($19,272)

Worst 5 States

Alaska ($102,389)

New Jersey ($85,615)

Hawaii ($77,371)

Connecticut ($71,960)

New Mexico ($61,387)

Total state debt as a percentage of gross state product for

private industries rankings

Best 5 States

Nebraska (10.05%)

Indiana (15.62%)

Tennessee (15.73%)

South Dakota (18.82%)

Virginia (18.84%)

Worst 5 States

Hawaii (71.39%)

Alaska (70.03%)

New Jersey (65.06%)

New Mexico (59.19%)

Ohio (56.83%)

Lesley Stedman Weidenbener is

editor at the Franklin College Statehouse News Bureau


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