New York has achieved the fifth-largest reduction in its debt-to-income (DTI) ratio among U.S. states over the last ten years, according to new research from Avenues Financial. The state saw a 12.36% decrease, with its DTI ratio falling from 1.173 in 2013 to 1.028 in 2023, the lowest among all 50 states.
The study analyzed Federal Reserve data to track changes in state DTI ratios between 2013 and 2023, identifying states with the most significant improvements in debt management. A lower DTI ratio reflects a healthier financial position, allowing governments to allocate more resources to essential services.
Washington led the rankings with a 19.23% reduction in its DTI ratio, dropping from 2.033 in 2013 to 1.642 in 2023. Illinois followed with a 15.19% decrease, while California and Virginia secured the third and fourth spots, reducing their ratios by 14.52% and 13.63%, respectively.
Nicole Jensen, CPA, co-founder and CFO of Avenues Financial, praised states with improved financial health. “Reducing a state’s debt-to-income ratio is crucial for long-term stability. It allows governments to invest in essential services like healthcare and infrastructure rather than paying high interest costs,” she said.
Vermont, Maryland, and Connecticut also ranked among the top ten, highlighting significant financial progress in several Democratic-leaning states. In contrast, North Dakota experienced the most substantial increase in its DTI ratio, rising 41.32% from 0.818 in 2013 to 1.156 in 2023, reflecting a decline in financial stability.
This analysis underscores the varying fiscal policies and debt management approaches adopted by states over the last decade.
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