Alabama taxpayers face $8,000 burden as state debt reaches $11.6 billion

Alabama needed more money to pay its bills in 2024, with the shortfall rising to $11.6

billion. This resulted in a Taxpayer Burden™ of $8,000, which led to a “D” grade from Truth
in Accounting.

This analysis is part of Truth in Accounting’s annual Financial State of the States report, which combs through lengthy government financial reports to uncover the true fiscal health of each state.

The full analysis found that 25 states did not have enough money to pay their bills at the end of fiscal year 2024. Every state, except Vermont, has a balanced budget requirement. Yet the states needed more than $765 billion to cover their expenses at the end of fiscal year 2024. This means that to balance their budgets—as is required by law in 49 states—elected officials have shifted current costs onto future taxpayers.

Federal funding for Alabama surged during the pandemic through emergency and short-term programs. As these supports expire and federal budget constraints intensify, the
risk of funding returning to pre-pandemic levels grows. This report considers a scenario
in which federal grants and contributions return to 2019 levels, adjusted for inflation.
If that occurs, Alabama could lose $2.9 billion, which is nearly 8 percent of estimated
spending for the state’s primary government. This loss would place additional strain on a
government already facing challenges in meeting its financial obligations.

Truth in Accounting’s report provides a roadmap for states to improve fiscal transparency, empowering citizens with the information needed to understand how public money is managed. You can explore the full report and see how Alabama compares to others at truthinaccounting.org.