The Best and Worst States Ranked by Their Finances

The Florida state Capitol building in Tallahassee.

The Florida state Capitol building in Tallahassee. Shutterstock.com

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Bill Lucia By Bill Lucia,
Executive Editor
 

Connecting state and local government leaders

By Bill Lucia

|

The Mercatus Center at George Mason University has a new 50-state analysis of financial conditions.

Florida comes out on top, with its government finances in the best shape compared to other states, in a new ranking of state fiscal health that university researchers published this week.

At the bottom of the list, with the worst-off state fiscal situation: New Jersey.

The Mercatus Center at George Mason University released the 2017 edition of its “Ranking the States by Fiscal Condition” report on Tuesday. The study, now in its fourth year, uses 13 metrics to analyze state finances based on five 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?

Information used to come up with the rankings was pulled from 2015 state comprehensive annual financial reports.

The full state rankings are shown in the table below.

(via Mercatus Center at George Mason University) 

The study was authored by Eileen Norcross, program director for the State and Local Policy Project at the Mercatus Center, and Olivia Gonzalez, a research associate for the State and Local Policy Project and a Ph.D. student at George Mason University.

A full copy of the report and related spreadsheet data can be found here.

Bill Lucia is a Senior Reporter for Government Executive’s Route Fifty and is based in Washington, D.C.

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