The Colorado government has $43.12 billion in debt, according to a new report.

The report, which was released by Reason Foundation, ranked Colorado’s debt 14th highest nationally at the end of the 2023 fiscal year. That is the most recent year that information is available.

California topped the report with nearly $500 billion in debt. South Dakota came in 50th with just $2.46 billion.

In an exclusive interview with The Center Square about Colorado, the report’s authors said every taxpayer should be deeply concerned with its findings.

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“Local debt directly affects residents through property taxes, sales taxes and service levels, influencing how much communities pay and what they receive in return,” said Mariana Trujillo, one of the authors. “By showing the financial condition of so many state and local governments in the nation — and mapping where debt actually sits — the study helps taxpayers understand the financial pressures shaping local budgets and serves as a tool to hold their governments accountable for long-term obligations.”

Per capita, Colorado’s debt ranked 19th highest nationally, with $7,469 in debt for each citizen of the state. That is slightly lower than the national average of approximately $8,000 per person.

The report also dug into debt in county governments, municipalities and school districts. It found that, in total, Colorado owes $104 billion. That makes the state the 15th highest nationally and works out to $17,969 per citizen, which is just slightly lower than the national average of $18,376.

According to the report, state and local long-term debt in Colorado is made up of bonded debt (45 percent), unfunded pension liabilities (40 percent), and unfunded retiree healthcare obligations (3 percent). Long-term debt means it is due in more than one year.

“Colorado’s state and local governments owe a combined $81 billion in long-term debt, equal to about $14,031 per resident, ranking it 13th highest in the nation for long-term debt per capita,” said Jordan Campbell, the report's other author. “The state government and school districts hold most of the long-term debt —$28.1 billion and $27.5 billion, respectively.”

Colorado’s debt is one of the worst in the mountain states region.

“Colorado stands out as a regional outlier: Neighboring states carry far lower long-term debt burdens,” Trujillo said. “In short, Colorado’s per-capita debt load is more than double that of several nearby states, driven largely by pension and bonded debt at the state and school district levels.”

Campbell said now is the time for state and local governments to make the changes that could have a long-term positive impact on the state’s overall fiscal position.

“The findings underscore the importance of fully funding public employee retirement obligations, such as pension and OPEB (retiree healthcare), each year – given they make up a large share of state and local government debt,” Campbell explained. “The outsized share that pension debt makes up of state and local government debt suggests that states should stress-test pension and debt assumptions against market downturns and interest rate shocks.”