Monday, April 22, 2024

Hawaii Is the Most Indebted State

Hawaii’s picturesque beaches and laidback lifestyle belie a raging riptide of debt threatening to sweep its residents out to fiscal sea. With over $19.7 billion in government debt and median household debt totaling $82,650 per capita, Hawaii scored an alarming 100 out of 100 on Forbes Advisor’s fiscal health index—ranking it the most debt-burdened state in the nation.

When states like Hawaii spend beyond their means, residents feel the pinch. To balance budgets, policymakers typically cut services or raise taxes, measures that can strain household finances—especially in Hawaii where incomes lag debt.

At 19.49%, Hawaii’s debt-to-GDP ratio exceeds every other state, saddling citizens with $13,681.67 in debt per person. Meanwhile, median household debt swallows 89.39% of residents’ median income, also among the worst ratios nationally.

While deficit spending can serve short-term needs, the bill eventually comes due. Now Hawaii faces stark choices – cut budgets, draw down precarious reserves, or impose steep tax hikes. Any option spells trouble, especially for lower-income residents living paycheck-to-paycheck.

While its natural beauty still awes many, Hawaii’s debt crisis means the state’s future finances could be headed from paradise to perdition. Citizens may find the costs—and strains—of island life becoming too heavy to bear.

Here is a live table from Forbes Advisor showing the U.S. states with the highest and lowest debt burdens:

Top 5 States With the Most Debt:

  • Hawaii (100 out of 100)
    "The state ranks third-highest for household debt per capita, with the average resident carrying a debt of $82,650. To provide context, this debt load is a considerable financial strain, constituting 89.39% of the median income."
  • California (96.51 out of 100)
    "California has the second-highest household debt balance and fourth-highest government debt balance across all states. This places the Golden State second on our list of the most indebted states."
  • Colorado (94.19 out of 100)
    "Coming in as the third most indebted, Colorado's government holds $11,940.00 in debt per capita. While this is relatively low compared to other states, Colorado’s debt represents 14.20% of the GDP, putting the state at the 11th-worst rank for that metric."
  • Oregon (88.37 out of 100)
    "Oregonians have the seventh-highest household debt in the nation. The average Oregon household owes $66,950, which is equivalent to 88.49% of the median household income."
  • Nevada (79.07 out of 100)
    "Nevada is one of only seven states with no income tax, but Nevadans face some of the highest unemployment rates in the nation and carry high debt balances compared to other states."

Top 5 States With the Least Debt:

  • Oklahoma (0 out of 100)
    "The Sooner State has the fourth-lowest government debt in the nation at just $4,786.67 per capita. In total, the state government’s debt accounts for 7.93% of Oklahoma’s GDP, making it fourth-lowest nationwide."
  • Iowa (4.65 out of 100)
    "Iowa holds a government debt of $6,968.45 per capita, which accounts for 9.36% of the state’s total GDP and makes Iowa the 10th-lowest ranked nationwide."
  • New Hampshire (17.44 out of 100)
    "Not only does New Hampshire have the lowest unemployment rate in the U.S., but New Hampshirites carry the 16th-highest household debt per capita. While consumer debt equates to 70.26% of household income, the state's residents owe a comparatively low average debt balance of $63,230."
  • Nebraska (17.44 out of 100)
    "Like New Hampshire, Nebraska has both a low unemployment rate and a relatively low household debt (10th-lowest). Nebraska households owe an average of $47,580, which is equivalent to 68.37% of total annual earnings."
  • Ohio (20.93 out of 100)
    "Ohio residents enjoy a fairly low cost of living, and they also have the sixth-lowest debt burden nationwide relative to income. While household debt is quite high at $44,210 per capita, the average resident carries debt equivalent to 67.27% of their earnings."

Photo by Alexander Grey on Unsplash.

Hawaii Star Wire

Press releases, media advisories, and other announcements submitted to the Hawaii Star.

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