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On Thursday, Sept. 25, Truth in Accounting (TIA) released its annual Financial State of the States report, and once again Connecticut finds itself near the very bottom. The state earned an F, ranked 49th out of 50, and carries a per-taxpayer burden of $44,500. In simple terms, every taxpayer would have to write a check of that amount to pay off the state’s obligations today.  

For over a decade, Connecticut has been designated as a “Sinkhole State” — one of those whose unfunded promises drag taxpayers down with them. Conversely, fiscally sound states are labeled “Sunshine States.” This stark distinction is based on a simple, honest methodology: a state’s available assets minus its bills (critically including full pension and retiree health care liabilities), divided by the number of taxpayers. The result is either a taxpayer surplus or a crippling debt burden.  

Fifteen Years at the Bottom: A Structural Insolvency 

If there’s one constant in TIA’s 15 years of rankings, it is Connecticut’s immovable place at the back of the pack. The best ranking the state has ever achieved is 48th, and in other years, it has been 49th or 50th. The precise numbers fluctuate, but the fundamental conclusion does not: Connecticut remains structurally insolvent. 

Recent reports tell the story: 

• 2022 report (FY2021): 49th, ~ $56,550 burden. 
• 2023 report (FY2022): 49th, ~ $50,700 burden. 
• 2024 report (FY2023): 50th,  ~ $44,300 burden. 
• 2025 report (FY2024): 49th, ~ $44,500 burden. 

Even when the numbers look a little better, Connecticut remains structurally insolvent. For fifteen years, we’ve been stuck at the back of the pack. 

The 2024 Snapshot: Cushion, Not a Cure 

In 2024, Connecticut’s overall financial health saw some improvement, mirroring a national trend. However, this progress was insufficient to pay all the bills, leaving a $61.8 billion gap and solidifying the $44,500 taxpayer burden. As a result, the state’s “F” grade is non-negotiable.  

State officials often celebrate the $4.1 billion rainy day fund as a sign of fiscal success. This is misleading. This reserve is a cushion, not a cure, for the billions in long-term, structural obligations the state faces, especially severely underfunded pension and retiree health care benefits. Connecticut has saved:  

• Less than 60 cents for every $1 owed in pensions. 
• Less than 15 cents for every $1 promised in retiree health care. 

According to TIA, “that’s not fiscal health — it’s deferred responsibility disguised as savings.” 

Furthermore, the recent influx of temporary federal COVID-19 aid has only masked the underlying problem.  As this aid declines and federal grants revert to pre-2019 inflation-adjusted levels, Connecticut could see a potential $2.3 billion reduction in revenue — roughly 5 percent of projected annual expenses. This is a structural hole that cannot be filled with political spin.  

On paper, here’s what taxpayers are carrying: 

• Bonds: $34.2 billion 
• Unfunded pensions: $8.6 billion 
• Unfunded retiree health care: $34.9 billion 
• Capital debt: $19.3 billion 
• Other liabilities: $14.1 billion 
• Total obligations: $83.0 billion 

Bottom line: Connecticut families already owe the equivalent of a new car, or a year of tuition at UConn, just to cover the state’s past promises. 

A Stark Contrast 

The regional comparison is damning. Every other New England state outranks Connecticut, proving that our fiscal dysfunction is not simply a regional ailment: 

• Maine (25th, B): A regional bright spot with reforms that shrank its retiree health liability. 
• New Hampshire (26th, C): A modest -$700 burden. 
• Rhode Island (37th, D): -$8,500 burden. 
• Vermont (43rd, D): -$12,500 burden. 
• Massachusetts (47th, F): -$24,900 burden—proving that high taxes do not guarantee fiscal health. 

Connecticut is not just the weakest link in New England; it is virtually tied with New Jersey (-$44,500), the long-standing poster child for state fiscal failure, while neighboring New York ranks 36th with a far smaller -$8,400 burden. 

Contrast this with the nation’s leader, North Dakota, which finished the fiscal year with a $63,300 Taxpayer Surplus and an “A” grade. That state demonstrated true stewardship by closing its defined benefit plan to new employees, proactively securing taxpayers from open-ended pension risk. 

Why the Guardrails Matter 

This is why Connecticut’s fiscal guardrails are non-negotiable. Enacted in 2017, these rules cap spending growth, divert volatile revenues into reserves, and mandate that surpluses be used for debt reduction. They are the only mechanism preventing Connecticut politicians from repeating the cycle of spending windfalls, raiding reserves, and pretending tomorrow never comes. 

The report makes clear: Connecticut’s rainy-day fund is a cushion, not a cure. Pension obligations — funded at less than 60 percent — and retiree health promises — funded at under 15 percent — are compounding faster than investment returns can cover them. Just one budget cycle of undisciplined spending could erase years of hard-won progress. 

If Connecticut is to Escape “Sinkhole State” Status, the Path is Straightforward.  

1. Defend the Guardrails: Legislators must resist all pressure — political or budgetary — no more “temporary adjustments,” raids, or gimmicks that weaken them when political pressure mounts.  
2. Prioritize Debt Reduction: Any genuine surplus must be automatically directed toward paying down unfunded pension and retiree health obligations, not to creating new, recurring programmatic expenses.  
3. Plan for Less, Not More: Hartford must immediately adjust its long-term budget projections to account for the fading of temporary federal aid. Budgets must be built on the assumption that Washington’s relief is ending. 
4. Embrace Structural Reform: Connecticut would be wise to study the foresight shown by North Dakota and others by seeking responsible, phased strategies for moving away from unsustainable defined benefit pension models for future employees to cap massive, open-ended taxpayer risk. 

Connecticut has shown it can act responsibly, but only when the rules leave no choice. After fifteen years at the bottom, the lesson is clear: without the fiscal guardrails, the state will never climb out of “Sinkhole State” status.  

The only question is whether lawmakers will stay the course — or once again trade tomorrow’s solvency for today’s headlines. 

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