North Dakota Leads Nation in State Financial Health, Report Finds

North Dakota has emerged as the state with the healthiest finances in the United States, according to the 2026 Financial State of the States report by Truth in Accounting. The state concluded fiscal year 2025 with a surplus of $21 billion, resulting in a "Taxpayer Surplus" of $72,300 per taxpayer, the highest in the nation.

This financial cushion provides North Dakota with greater resilience against economic downturns, allowing it to maintain public services and meet its financial obligations. The state's strong position is attributed in part to its Legacy Fund, an investment fund built with revenue from oil, gas, and coal taxes. Despite fluctuations in energy prices, robust investment earnings and federal grants have helped offset declines in tax revenues.

In contrast, the report found that 24 states do not possess sufficient assets to cover their financial liabilities. New Jersey ranked last, with a shortfall of $162.3 billion, translating to a "Taxpayer Burden" of $45,800 per taxpayer. Other states facing significant financial challenges include Connecticut, Illinois, Massachusetts, and California.

The report highlights that unfunded retirement obligations remain a significant pressure point for state finances nationwide. Collectively, states had $775 billion in unfunded pension liabilities and $490 billion in unfunded retiree healthcare obligations as of fiscal year 2025. However, most states saw financial improvements in 2025, partly due to strong investment returns that bolstered pension assets and reduced unfunded pension obligations. Truth in Accounting cautioned that these gains are susceptible to market volatility.

North Dakota was followed in the rankings by Alaska, Wyoming, Utah, and Tennessee, all of which reported taxpayer surpluses. The report's methodology calculates the taxpayer surplus or burden based on a state's assets available to cover its bills, offering a snapshot of fiscal health from a taxpayer's perspective. It is important to note that the "Taxpayer Surplus" figure does not represent direct financial returns to residents but rather their proportional share of the state's financial surplus.