Connecticut, Hawaii and Massachusetts have the highest combined bonded debt and pension obligations in the U.S. relative to their revenues and economies, according to a report from Moody's Investors Service.
Moody's analysis was its first of both debt and pension obligations, offering what it called a clearer view of the states' overall liabilities, according to a news release from the ratings agency.
“Pensions have always had an important place in our analysis of states, but we looked separately at tax-supported bonds and pension funds in our published financial ratios,” Moody's analyst Ted Hampton said in the news release. “Presenting combined debt and pension figures offers a more integrated — and timely — view of states' total obligations.”
Mr. Hampton also noted that “not all states with large debt burdens also suffer from weak pension funding,” citing California, Delaware and New York as examples.
The report, “Combining Debt and Pension Liabilities of U.S. States Enhances Comparability,” also notes that the state and local governments' pension obligations will be the subject of further reports in the coming months.