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***Note from The Tennessee Conservative – this article posted here for informational purposes only.
Article by Kim Jarrett, The Center Square –
Tennessee ranks fifth in Truth in Accounting’s 2026 State of the States report, with a taxpayer surplus of $11,400, earning an “A.”
Tennessee ranks highly because state officials do not spend more than taxpayers are willing to give them, Sheila Weinberg, founder and CEO of Truth in Accounting, told The Center Square in a digital interview. Overall, the state has $49.7 billion available to pay $23 billion of bills.
One of the reasons for Tennessee’s high ranking is its high share of federal revenue. The state received 41% ($25.3 billion) in federal grants, according to Truth in Accounting’s report, which examines fiscal year 2025 financial data.
“What happened is during COVID, the federal government stepped in to help the states and the percentage of what the states were getting from the federal government rose,” Weinberg said. “And that has not been pulled back.”
The success of the stock market and investment markets is also a factor, Weinberg said.
“So, as part of our number, we have the unfunded pension liability and the unfunded retiree healthcare liability,” she said. “And what’s going on there is that as the markets are doing well, the pension assets are doing well.”
Weinberg said even though Tennessee’s retirement plan is funded at 100%, it should be overfunded.
“Historically, every seven to 10 years, we have an unexpected crisis,” Weinberg said. “When we get this crisis, the markets will take a hit, and there should be a big cushion to handle that hit. Their retiree healthcare benefits, which are $637 million, they only have 67 cents available for every dollar they’ve promised.”
A fiscal year 2025 audit of the Tennessee Consolidated Retirement System showed the plan increased by $5.3 billion, 7.7% during the year and assets were at $74.9 billion.
The amount of benefits and refunds paid was $3.5 billion, an increase of 4.8% from fiscal year 2024, the audit said.
“The growth is primarily due to the retiring members’ benefits exceeding the benefits of long-term retired members whose benefits ceased due to death,” auditors said in the report. “Additionally, a 3% cost of living adjustment was given in July 2024 instead of the assumed 2.125%.”
Truth in Accounting began its annual analysis of state finances in 2009, Weinberg said.
“The reason we started doing them was at that point in time, the accounting standards that the state and local governments used required the governments to keep the vast majority of their pension liabilities off their balance sheets,” Weinberg said. “So the legislators and the citizens were not being provided a true financial picture of their governments.”
