None of the 12 States With the Greatest Total Public Debt Per Capita Has a Right to Work Law

For several years now, the nonpartisan taxpayer watchdog group State Budget Solutions (SBS) has been issuing annual reports on state finances that present “an all-inclusive view of state obligations not conventionally presented but that both lawmakers and taxpayers nonetheless must confront.”  The 2014 report, linked below, compiles data on each state’s “market-valued unfunded pension liabilities, outstanding government debt, unfunded other post-employment benefit (OPEB) liabilities, and outstanding unemployment trust fund loans.”

It is not particularly significant that, according to SBS’s findings, all of the states with the highest absolute total debt are large population states.  High-population states have greater absolute resources to cover their debts than do smaller states.

A far more reliable, albeit still imperfect, measure of any state’s fiscal soundness is total debt per capita.  That’s undoubtedly why SBS also reported the top five and the bottom five states for total debt on a per capita basis.  The other day, the National Institute for Labor Relations Research calculated total per capita debt for all 50 states, using annual population data for 2013 as reported by the U.S. Census Bureau.

On average, the 50 states and Washington, D.C., have an average total per capita debt of $16,065, according to the Institute’s estimate.  But debt levels vary sharply from state to state.  And there is a strong negative correlation between a state’s per capita indebtedness and its having a Right to Work law on the books barring the extraction of forced union dues and fees from employees as a job condition.

The 26 states without such a law  have an average total state debt of  $19,621 per resident.   In contrast, the 24 states with Right to Work laws on the books have an average total state debt of $11,886 per capita.

All of the 12 states with the greatest per capita debt (Alaska, California, Connecticut, Hawaii, Illinois, Kentucky, Massachusetts, New Jersey, New Mexico, New York, Ohio and Oregon) lack Right to Work laws.  But 13 of the 14 states with the lowest per capita debt (Arizona, Florida, Georgia, Idaho, Indiana, Iowa, Mississippi, North Carolina, Oklahoma, South Dakota, Tennessee, Utah and Virginia) have Right to Work laws.  The only state in the bottom 14 for per capita debt that does not currently prohibit forced union dues, Wisconsin, actually did adopt a statute in 2011 protecting the Right to Work of all K-12 education employees and many other public-sector workers.

As the Institute has pointed out elsewhere, the average forced-unionism state has a significantly heavier tax burden than the average Right to Work state, but even this greater burden is obviously insufficient to cover all the government spending union lobbyists are able to ram through the legislatures of states where employees may be fired for refusal to join or pay dues to an unwanted union.

In forced-unionism states, Big Labor has had a lot of success in lobbying for heavier tax burdens, but even more success in lobbying for higher government spending. It’s not surprising, then, that total per capita state debt is negatively correlated with Right to Work laws. Image: Parker Brothers

State Budget Solutions‘ Fourth Annual State Debt Report