Study ranks states' fiscal conditions
Jan 14, 2014 | 1127 views | 0 0 comments | 5 5 recommendations | email to a friend | print

Top 10:

1. Alaska

2. South Dakota

3. North Dakota

4. Nebraska

5. Wyoming

6. Florida

7. Ohio

8. Tennessee

9. Montana

10. Alabama

Bottom 10:

50. New Jersey

49. Connecticut

48. Illinois

47.Massachusetts

46. California

45. New York

44. Maryland

43. Hawaii

42. Pennsylvania

41. West Virginia

40. Kentucky

 

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State Fiscal Condition: Ranking the 50 States

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.

 

Cash Solvency

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.

 

Budget Solvency

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

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

Service-level solvency reflects whether state governments have the resources to provide their residents with an adequate level of services.



Click here for larger maps or to access the entire paper.

 

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