North Dakota leads 2026 state finance report with taxpayer surplus

Of the 50 US states, 24 do not have enough money to pay their bills. Meanwhile, one under-the-radar red state stands out from the rest, according to a new public finance analysis.

North Dakota ranked No. 1 in Truth in Accounting’s 2026 State of the States report, ending fiscal 2025 with $21 billion more than it needed to pay the state’s bills. This financial cushion gave North Dakota the highest “taxpayer surplus” in the country at $72,300.

The taxpayer surplus figure does not mean that state residents receive that amount of money in their pockets at the end of the year — rather, it represents each taxpayer’s share of the state surplus according to the group’s methodology.

The gap between states with a surplus and those with a burden is large, especially when the economy weakens. States with stronger balance sheets have more room to weather recessions, maintain public services and meet their pension obligations, while states with large unfunded debts may face tougher choices about taxes, spending and borrowing when revenues decline.

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North Dakota’s oil boom has transformed the state’s economy and now generates billions of dollars in tax revenue each year. (Jim West/UCG/Universal Images Group via Getty Images)

North Dakota’s financial situation has been strengthened by its Legacy Fund, a public investment fund built with oil tax revenues.

Although tax revenues from oil, gas and coal declined amid falling energy prices, strong investment revenues and federal grant revenues helped offset the decline, the report said.

North Dakota was followed in the ranking by Alaska, Wyoming, Utah and Tennessee. All five states had tax surpluses ranging from $11,400 in Tennessee to $72,300 in North Dakota. The financial situation of this handful of states stands in stark contrast to that of nearly half the country.

The report found that 24 states do not have enough available assets to cover their financial obligations.

New Jersey comes in last place, with a deficit of $162.3 billion. Truth in Accounting translates this gap into a “tax burden” of $45,800, the highest in the country. Connecticut ranked 49th, followed by Illinois, Massachusetts and California.

The five poorest states had tax burdens ranging from $16,000 in California to $45,800 in New Jersey.

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North Dakota ranked No. 1 in Truth in Accounting’s 2026 analysis of state finances, finishing fiscal 2025 with $21 billion more than it needed to cover its bills. (Bryan Bedder/Getty Images/Theodore Roosevelt Presidential Library)

Long-term pension obligations are a major source of pressure on public finances.

Nationwide, states had $775 billion in unfunded pension liabilities and $490 billion in unfunded retiree health care obligations in fiscal year 2025, according to the report.

Despite these deficits, most states improved financially in 2025. Strong investment returns boosted pension assets and helped reduce unfunded pension obligations, although Truth in Accounting warned that these gains can reverse when markets fall.

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