Financial State of the States 2025

from Truth in Accounting, September 25, 2025

Our sixteenth annual Financial State of the States (FSOS) report provides a comprehensive analysis of the fiscal health of all 50 states. At the end of fiscal year 2024, 25 states did not have enough money to pay their bills.

Click here to view the full PDF version of the report.

Hawaii’s Financial Breakdown

• Money Needed to Pay Bills $4.4 billion
• Taxpayer Burden $8,800
• Ranking (Out of 50) 39
• Financial Grade D

In 2024, Hawaii experienced an improvement in its financial situation, similar to that of many other states. But it still didn’t have enough money to pay all of its bills and needed $4.4 billion to fill the gap. That means each taxpayer would have to contribute $8,800 to help pay off the state’s debt. As a result, Hawaii earned a “D” grade from Truth in Accounting.

While Hawaii’s reported revenues exceeded expenses in 2024, much of the improvement in its financial condition resulted from reclassifying nearly $3 billion in assets from restricted to unrestricted. Previously, the state indicated that funds were set aside for purposes such as capital maintenance, health and welfare, natural resources, Native Hawaiian programs, education, regulatory and economic development, and administrative support. Now, the state has indicated those resources are available for other uses, which may warrant further clarification regarding the classification.

Hawaii has received substantial temporary federal aid since 2020 in response to the COVID-19 crisis. This additional funding contributed to improvements in the state’s financial condition and increased its available resources to pay bills. However, as this aid declines and national budget tightening continues, future funding may return to more typical levels. This analysis models a return to 2019 federal grants and contributions, adjusted only for inflation. If that occurs, Hawaii could see a $1.9 billion reduction in federal funding, which represents around 10 percent of projected expenses for the state’s primary government and may present challenges for maintaining services and balancing the budget.

Hawaii’s Financial Facts

FACT #1: Hawaii had $17.3 billion available to pay $21.7 billion worth of bills.

FACT #2: Ranking The outcome was a $4.4 billion shortfall, which breaks down to a burden of $8,800 per taxpayer.

FACT #3: Hawaii may lose $1.9 billion in federal funding (10 percent of expenses) if allocations return to 2019 levels, adjusted only for inflation.

The data in this report is derived from Hawaii’s audited 2024 Annual Comprehensive Financial Report and its retirement systems’ reports. To explore prior years or compare financial, demographic, and economic data across other states and cities, visit Data-Z.org.

read … Full Report

S: Half the states don’t have enough money to cover all their bills, report finds • Stateline

CS: Report: 25 state governments don’t have enough money to pay their bills | National | thecentersquare.com