Forty nine of the 50 states have balanced budget requirements, but some appear to work better than others. 

In a 2007 book titled Rules and Restraint:  Government Spending and the Design of Institutions, David Primo classified the 50 states in two groups – those with ‘strict’ balanced budget requirements and those with ‘weak’ balanced budget requirements.  Primo called a state balanced budget requirement ‘strict’ if two criteria were present -- the requirement did not allow the state to carry over the deficit into the next year, and the state’s highest court was elected directly.    By this definition 17 of the 50 states have ‘strict’ balanced budget requirements.

Truth in Accounting has developed a measure of state debt loads called Taxpayer Burden.  This measure accounts for overall state obligations, including off-balance sheet obligations, in light of assets available to pay bills.  The chart above compares the average Taxpayer Burden across states with ‘strict’ balanced budget requirements to states with ‘weak’ balanced budget requirements. 

The Taxpayer Burden in states with ‘weak’ balanced budget requirements runs 40% higher, on average, than it does in states with ‘strict’ balanced budget requirements.  In turn, states with ‘weak’ balanced budget requirements spend more than they take in at a significantly higher rate than states with ‘strict’ requirements.  The 17 states with ‘weak’ balanced budget requirements outspent their revenue roughly one-third of the time from 2005 to 2011, while the 33 states with ‘strict’ balanced budget requirements outspent their revenue during one-fifth of that period.