1. The State of Tennessee has been ranked No. 5 for its good budgeting and overall financial health last year. What does this mean for Tennesseans?
A: The ranking comes from a report called the Financial State of the States 2024 from a nonprofit called Truth in Accounting.
Based on FY 2023 annual comprehensive financial reports, Tennessee is growing its surplus, and that means it could give taxpayers a refund.
Now will it do that, probably not, but it should.
The state could and should institute permanent tax cuts and strengthen the rainy-day fund. Tennessee’s savings are surprisingly below average, coming in 36th out of 50 states at 8.7 percent of general fund expenditures.
2. How has Tennessee been ranked in the past and how does it compare to other states?
A: Since at least 2017, the state has been ranked high up, 5, 6 or 7 in the country.
Tennessee has been able to spend without adding debt. It’s no 5, following N. Dakota, Alaska, Wyoming and Utah in paying its bills, not incurring new debt and funding pensions and retiree health care benefits.
That’s compared to 27 states that didn’t have enough money to pay their bills – they have underfunded pensions by $840 billion and underfunded retiree health care benefits by $493 billion.
The states with the worst financial status are California, Massachusetts, Illinois, New Jersey and Connecticut.
In Tennessee, the state’s pension plan is fully funded and the state has a surplus.
Bottom line for several years now: “Tennessee had more than enough money to pay its outstanding bills,” the report said.