The fiscal health of the 50 American states affects all its citizens. There are a variety of indicators of fiscal health – ranging from a state’s ability to attract new business, the level of taxation, and what services it provides. If an individual is looking to move, buy a house, or open a business- these indicators play a key role in making such decisions. Read on to view the official Mercatus Center fiscal ranking of all 50 states, and to see where your home state comes in!
Summary and Key Findings
A study from George Mason University :
The financial health of each state can be analyzed through the states’ own audited financial reports. By looking at states’ basic financial statistics on revenues, expenditures, cash, assets, liabilities, and debt, states may be ranked according to how easily they will be able to cover short-term and long-term bills, including pension obligations.
This ranking of the 50 states, reproduced from page 29 of the study, is based on their fiscal solvency in five separate categories:
- Cash solvency. Does a state have enough cash on hand to cover its short-term bills?
- Budget solvency. Can a state cover its fiscal year spending with current revenues, or does it have a budget shortfall?
- Long-run solvency. Can a state meet its long-term spending commitments? Will there be enough money to cushion it from economic shocks or other long-term fiscal risks?
- Service-level solvency. How much “fiscal slack” does a state have to increase spending if citizens demand more services?
- Trust fund solvency. How large are each state’s unfunded pension and healthcare liabilities?