(The Center Square) – Michigan ranked 30th nationally in Truth in Accounting’s 2026 “Financial State of the States” report.
The state received a “C” grade because it does not have enough money to cover its bills, according to the report. Michigan had a $2,000 taxpayer burden, the measure used to determine the state’s ranking.
Although Michigan’s finances remained in the negative, this year’s report showed improvement in the state’s financial standing from last year – when it ranked 32nd nationally.
Sheila A. Weinberg, founder and CEO of Truth in Accounting, discussed the findings with The Center Square in an exclusive interview.
“Michigan’s financial condition improved largely due to double-digit investment returns on pension fund assets. As a result, the state’s pension obligations are now 80% funded,” Weinberg said. “However, given these historically strong investment returns, the pension systems should ideally be overfunded to provide a financial cushion when markets inevitably experience downturns.”
In total, Michigan had $42.1 billion available to pay $48.8 billion worth of bills. That means Michigan has $6.7 billion in unfunded obligations.
“Despite a balanced budget requirement, Michigan has accumulated $6.7 billion in bills in excess of the assets available to pay bills,” Weinberg said. “This results in a taxpayer burden (per taxpayer share) of $2,000.”
That figure is down significantly from $4,100 per taxpayer in 2025, a decline Weinberg also attributed to continued “historically high” federal funding.
“Federal grants accounted for 40% of the state’s revenue,” Weinberg said. “Although the COVID-19 public health emergency ended several years ago, federal funding remains at levels comparable to those provided during the pandemic, raising questions about the sustainability of the state’s reliance on these funds over the long term.”
This leaves Michigan particularly vulnerable to federal funding cuts, which Weinberg warned could pose challenges in the coming years.
“Given the strong investment returns and historically high levels of federal funding, I believe states should be in a stronger financial position to weather unexpected economic and financial crises, which tend to occur periodically, often every seven to ten years,” she said. “Maintaining adequate reserves and reducing unfunded liabilities would help states withstand future downturns without placing additional financial burdens on taxpayers or cutting essential services.”
Because Michigan receives federal funding, it was required to conduct a spending audit that identified accounting and oversight issues. The report warns that these weaknesses could leave the state vulnerable to potential fraud.
“Missing documentation, late reporting, inadequate review, and weak procedures led to inaccurate financial reports, unsupported expenses, and difficulty confirming that federal funds were properly managed,” Weinberg explained.
Unfunded pensions make up a substantial portion of Michigan’s financial obligations. The report found that the state’s major retirement systems had a combined $24 billion in unfunded liabilities. If the shortfall is not addressed, retirees could face reduced benefits, or workers and taxpayers could be required to contribute more.
Compared with other states, Michigan’s financial condition was roughly in the middle of the pack. North Dakota ranked first in the report, with a surplus of $72,300 per taxpayer, while New Jersey ranked last at No. 50, with a deficit of $45,800 per taxpayer.
The report found that, at the end of 2025, 24 states did not have enough money to pay their bills.
Weinberg explained why every American should care about the report’s findings.
“Understanding whether states have sufficient resources to cover their bills helps citizens evaluate how responsibly their tax dollars are being managed and whether current fiscal policies are sustainable,” she said. “A state’s financial condition can affect the services residents rely on, the taxes they pay, and the financial burdens passed on to future generations.”
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(The Center Square) - Federal regulators authorized initial construction Tuesday on a southwest Louisiana gas storage project and related infrastructure that developer Black Bayou Energy Hub LLC says represents a planned $1.6 billion investment.The Federal Energy Regulatory Commission’s Oct. 20 limited notice to proceed, listed under docket CP24-494-000, authorizes Black Bayou Gas Storage LLC, a subsidiary of Black Bayou Energy Hub, to begin construction of certain facilities. The project, backed by global energy trader Mercuria, includes a 720-acre site in Cameron Parish about 7 miles east of the Louisiana-Texas border.In a Sept. 10, 2026, announcement, Louisiana Economic Development said the state offered the company $1 million for infrastructure improvements and workforce assistance. LED said the company is also expected to participate in the state’s High Impact Jobs and Industrial Tax Exemption programs. The announcement did not specify the value of those anticipated benefits.LED estimates the project will create 23 direct jobs and 35 indirect jobs across southwest Louisiana and Acadiana and support more than 1,000 temporary jobs at peak construction.“Receiving FERC certification is a key inflection point for the Black Bayou Energy Hub,” said Boris Bystrov, managing director of investments at Mercuria, in an Oct. 1, 2025, statement about the earlier certificate approval. “Strategic infrastructure projects like this are essential to our broader mission of enhancing market efficiency and supporting the energy transition. We are proud to back the development of this highly flexible and commercially significant asset in the heart of the U.S. Gulf Coast.”The construction authorization is separate from a capacity amendment that the company says FERC approved to increase the project’s working gas capacity from 34.7 billion to 44.4 billion cubic feet.Tuesday's approval allows the developer to begin work on aboveground buildings, well pads and the leaching plants required to carve storage space in the subterranean salt dome. The authorization also covers a high-capacity compressor station and 18 freshwater and saltwater disposal wells needed to create the underground caverns.The Black Bayou storage hub will connect directly to 10 major interstate natural gas pipelines, according to the developer’s federal regulatory filing. Those pipelines supply utilities across the eastern half of the country, industrial manufacturers and 10 liquefied natural gas export plants operating or under construction within a 25-mile radius.The company says current and planned LNG facilities within 25 miles represent more than 30 billion cubic feet per day of gas demand, while industrial projects with high energy needs and growing power generation at regional utilities also compete for supply.The Black Bayou hub's planned high deliverability rates would allow its operators to pull up to 1.6 billion cubic feet of gas per day off the interstate natural gas pipeline network for underground storage when supplies are plentiful. Alternatively, during extreme weather, the facility could rapidly deliver up to 2 billion cubic feet per day back into the regional market, which the developer says could help moderate price spikes.Lafayette-based Black Bayou Energy Hub expects to begin commercial storage of gas in two salt caverns in 2028 with construction on all four planned caverns extending through 2030.“More than $48 billion in LNG projects have been announced in Louisiana since 2024, and investment at that scale creates demand for the infrastructure and businesses needed to support it,” Louisiana Economic Development Secretary Susan B. Bourgeois said in the Sept. 10 announcement. “Black Bayou Energy Hub is a direct result of that momentum and an investment in sustaining it. This project strengthens the natural gas infrastructure that will serve major projects already underway while increasing Louisiana’s capacity to compete for what comes next.”
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