Ranking the States' Fiscal Health: New Study

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Mercatus Center at George Mason University releases detailed rankings exposing the fiscal health of every U.S. state, in the most comprehensive academic study of its kind.

Overall fiscal solvency: Where do the 50 states rank?

“These rankings are an early warning system for the public, journalists, and policymakers."--study author and Mercatus Center Senior Research Fellow Eileen Norcross.

This week, the Mercatus Center at George Mason University released detailed rankings exposing the fiscal health of every U.S. state, in the most comprehensive academic study of its kind.

“These rankings are an early warning system for policymakers, journalists, and the public,” said the study’s author, Mercatus Senior Research Fellow Eileen Norcross. “While no ranking can capture all of a state’s fiscal dynamics, these can serve as a tool to guard against short-term and long-term risks or economic shocks.”

In many states, revenues are increasing and budget gaps are shrinking. But there are clouds on the horizon in the form of growing health care and pension cost commitments and credit rating downgrades.

States that carry low levels of debt and spending rank highly, as do those with the built-in advantage of abundant oil and gas revenues. States with structural financial problems and unsustainable pension systems place at the bottom.

Overall State Fiscal Health Rankings:
1. Alaska
2. North Dakota
3. South Dakota
4. Nebraska
5. Florida
6. Wyoming
7. Ohio
8. Tennessee
9. Oklahoma
10. Montana
11. Utah
12. Nevada
13. Alabama
14. Missouri
15. Idaho
16. Indiana
17. South Carolina
18. Iowa
19. Texas
20. New Hampshire
21. Virginia
22. Colorado
23. Washington
24. Kansas
25. Oregon
26. Georgia
27. North Carolina
28. Wisconsin
29. Arkansas
30. Delaware
31. Minnesota
32. Arizona
33. Mississippi
34. Michigan
35. Louisiana
36. New Mexico
37. Maryland
38. Rhode Island
39. Vermont
40. Hawaii
41. Pennsylvania
42. Maine
43. West Virginia
44. California
45. Kentucky
46. New York
47. Connecticut
48. Massachusetts
49. New Jersey
50. Illinois

The rankings include five separate sub-rankings assembled from 2013 state financial reports (the most up-to-date set available):

Cash Solvency: Which states can pay their short-term bills?
Budget Solvency: Which states have enough money on hand for a full fiscal year?
Long-Run Solvency: Which states have enough revenue coming in to cover yearly costs, including pension benefits and infrastructure?
Fiscal Slack: Which states have enough fiscal slack to increase spending?
Trust-Fund Solvency: Which states have the most debt or unfunded pension and health care liabilities?

For individual state web pages, more maps, video, or the complete study, please visit mercatus.org/statefiscalrankings.

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