Employment in the Real Private Sector
Freedom in the 50 States
New York's Future Flees to Florida
In the wake of the Great Recession, many states are still facing severe fiscal challenges amid questions about health care costs, employee pensions, and other concerns.
New Mercatus Center at George Mason University research provides a tool for policymakers, journalists, and citizens to assess each state’s ability to meet its long- and short-term obligations.
The study, authored by Sarah Arnett, uses 2012 financial reporting data to rank each state based on the four solvency measures described below.
Overall Fiscal Condition (pictured above)
Although the overall ranking is a snapshot in time, the states at the bottom are there due to years of poor financial management decisions, bad economic conditions, or a combination of both.
A state's cash solvency reflects the cash it can easily access to pay its bills in the near term, or the state government's liquidity. Most states have enough cash on hand to meet their short-term obligations.
A state’s budget solvency is its ability to create enough revenue to cover its expenditures over a fiscal year. As the map shows, budget solvency varies greatly across states.
Long-run solvency measures each state's ability to cover all of its costs with incoming revenue, including long-term obligations such as guaranteed pension benefits and replacing infrastructure. Relative to the other measures, long-run solvency is less sensitive to economic trends.
Service-level solvency reflects whether state governments have the resources to provide their residents with an adequate level of services.