Today, State Budget Solutions (SBS), a nonprofit organization advocating for fundamental reform of state budgets, released its third annual state debt report revealing that aggregated debt across the 50 states exceeds $4.19 trillion. SBS's report, which takes into account all explicit state debt and future spending obligations, found that California had the largest debt with more than $617 billion and Vermont, North Dakota and South Dakotawere among the states with the smallest debt.

"These budget numbers should serve as a wake up call for every state legislature around the country. Our states are in trouble and no amount of budget gimmicks, political posturing or hiding bills will fix the massive debt that they face," said Bob Williams, President of State Budget Solutions. "There is no option for status quo or incremental adjustments. Drastic reforms, innovations and political courage are needed to put our states back on the road to fiscal survival."

SBS's report showed that total state debt fell slightly when compared to last year's report, from $4.24 trillion to $4.19 trillion. The decrease is attributable to reductions in unemployment trust fund loan and fiscal year budget gap totals. Market-valued unfunded public pension liabilities made up more than half of all state debt at $2.8 trillion. Regular outstanding debt and other post employment benefit liabilities each contribute around $600 billion to total debt.

The states with the five largest debts remained unchanged from last year's report, although New York and Texas moved up one and two spots, respectively. Overall, California leads the nation with largest total debt followed by New York ($300 billion),Texas ($286 billion), New Jersey ($282 billion), and Illinois ($271 billion), respectively. States with the lowest debt wereVermont ($5.8 billion), North Dakota ($6.1 billion), South Dakota ($6.5 billion), Wyoming ($6.9 billion) and Nebraska ($7.8 billion).

 State Budget Solutions calculated each state's debt amount using each state's regular debt, FY2013 budget gap, outstanding unemployment trust fund loans, unfunded other post employment benefit liabilities, and the state's unfunded pension liability.

"The time for action is now. State Budget Solutions urges state legislator to take responsibility for their own state's deficit and begin implementing real solutions to fixing this growing problem," said Williams.

To view the full report click here.