Texas Cuts Unpaid Bills to $400 Per Taxpayer as Washington’s Top $1.1 Million

Texas came within $3.9 billion of covering every bill it owes at the end of its 2025 fiscal year, down from a $10.8 billion gap a year earlier, according to Truth in Accounting’s annual Financial State of the States report, released October 15.

The nonprofit measures each state’s audited assets against everything it owes, including unfunded pension and retiree health care promises. Texas had $174.4 billion available to pay $178.3 billion in bills. Spread across the state’s taxpayers, the shortfall comes to $400 each, which earned Texas a C grade and placed it 27th of the 50 states.

What Texas owes

The report breaks Texas’s bills into bonds and other liabilities, $52.2 billion in unfunded pension benefits and $49.4 billion in unfunded retiree health care benefits. The pension figure closely matches the $52.4 billion in pension liabilities the Texas Comptroller reported in the state’s own annual financial report.

The report credits Texas with taking in more revenue than it spent, as it has in every year of the past decade except 2020. It found that the state’s unfunded pension liability did not fall much despite strong investment returns, because new legislation increased benefits for certain employees and educators and added $4.9 billion to the state’s pension obligations.

Texas also took in about $105.3 billion in federal grants in 2025, 40 percent of its revenue, according to the report.

Where Texas stands

Across all 50 states, the report found $624 billion in bills that states lacked the money to pay. Twenty-four states could not cover their bills, and Texas ranked best among them. New Jersey had the heaviest burden, $45,800 per taxpayer. North Dakota had the largest surplus, $72,300 per taxpayer.

The figures are an accounting measure, not a tax bill. Truth in Accounting excludes capital assets such as roads and buildings, and money restricted for specific purposes, from what a state has available, and divides the result by the number of taxpayers who owe federal income tax.

Washington’s books

The same group applies the same method to the federal government. Its Financial State of the Union report, released in April, found that Washington had $6.1 trillion available to pay $176.3 trillion in bills, including $74.5 trillion in Medicare promises and $54 trillion in Social Security promises that the Treasury leaves mostly off its balance sheet. That is a $170.3 trillion shortfall, or about $1.1 million for every federal taxpayer. The federal government got an F.

By the same measure, Texas would need $400 from each taxpayer to settle its bills. Washington would need $1.1 million, and Texans are on the hook for both.