And the nominees for Least Fiscally Solvent State in America, are…

posted at 5:21 pm on January 14, 2014 by Erika Johnsen

Most unfortunately, the government issue of unsustainable promises — and the unaffordable list of long-term liabilities thereby incurred — is hardly a uniquely federal habit. George Mason University’s Mercatus Center is out with another study on the statuses of the fifty states, this time taking a look at their various abilities to keep up with their financial obligations in the face of ongoing state budget challenges. Hint: “Fiscal simulations by the Government Accountability Office suggest that despite recent gains in tax revenues and pension assets, the long-term outlook for states’ fiscal condition is negative (GAO 2013).” Ouch.

Using 2012 data, the research takes a look at four different indices for measuring states’ solvency, including…

Cash Solvency

A state’s cash solvency takes into account the cash the state can easily access to pay its bills in the near term, reflecting the state government’s liquidity. The map below indicates that 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. Budget solvency varies greatly across states. As the map below shows, in fiscal year 2012-13 states had an operating ratio below 1, indicating a budget deficit.

… as well as long-run solvency (how much a state can use incoming revenue to cover all its expenditures, including long-term obligations like guaranteed pension benefits and infrastructure maintenance) and service-level solvency (whether state governments have enough resources to provide their residents with an adequate level of services). After combining and weighting the four indices to create an overall fiscal-condition index, the five states in the best shape were Alaska, South Dakota, North Dakota, Nebraska, and Wyoming, while the five in the worst shape were California, Massachusetts, Illinois, Connecticut, and New Jersey coming in dead last. (Quite the red vs. blue dichotomy there, eh? Just sayin.’)


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But…. But…. in California you will have your kid take lesbian 101 in high school while they celebrate Kwanza and Ramadan! I bet Montana or Wyoming doesn’t offer those options!

Vanceone on January 14, 2014 at 5:30 PM

Bottoms are all Repub red states. Typical.

Christien on January 14, 2014 at 5:32 PM

#50 is a shock.

/

Del Dolemonte on January 14, 2014 at 5:35 PM

Yeah, but Kalifornia is gonna have a “Bullet Train”! Too bad we can’t plant Moonbeam under the track bed.

GarandFan on January 14, 2014 at 5:36 PM

Del Dolemonte on January 14, 2014 at 5:35 PM

#51-57, no data reported.

Christien on January 14, 2014 at 5:37 PM

Maryland, my Maryland just missed a top five honor, coming in at 44.

Interesting that I just saw this on Twitter:

Breaking: Gov O’Malley’s new budget cuts $621 million, no tax or fee increases, and guess what: we’re selling state helicopters!

BKeyser on January 14, 2014 at 5:39 PM

Bottoms are all Repub red states. Typical.

Christien on January 14, 2014 at 5:32 PM

Either you forgot your sarc tag or you have no understanding of what ALL means.

Oldnuke on January 14, 2014 at 5:40 PM

BBBUT, in Oklahoma, our dhimocraptic politicians always run to the news papers and complain that those dastardly republicans are putting Oklahoma in the bottom ranks. You mean not being in the bottom is good?

Old Country Boy on January 14, 2014 at 5:42 PM

And look what happens in Ohio when Kasich is running the show. High cash solvency, and middling budget solvency. Would have been better if we hadn’t been torched on SB5 (Ohio’s collective bargaining statute trying to imitate Gov. Walker’s success), and if he hadn’t caved on the Medicaid expansion, we’d probably be even higher on the list.

The Schaef on January 14, 2014 at 5:43 PM

Oldnuke on January 14, 2014 at 5:40 PM

You are correct, sir!

Christien on January 14, 2014 at 5:43 PM

Those top states are all crap budgets anyway, so-called “catastrophic-only” budgets that won’t truly protect a state from Krugmalien invasion. Then where would they be?

These “bottom” states are really the “comprehensive” budgets that ensure nobody goes without.

The Schaef on January 14, 2014 at 5:47 PM

By the way, those who note my comments will note that I am no longer using the term “librul” or “libral.” “Liberal had noble connotation in way past years. However the dhimocrapt communist marxists havd destroyed that noble name in the manner that the COMINTERN prescribes – Change the language so that the good is bad and the bad is good. I will now call them what they are – marxists and dhimocrapts or demorats. I implore all others to do the same. Let us rescue the liberal name from those who would destroy it, in the name of political power.

Old Country Boy on January 14, 2014 at 5:47 PM

How could it be that loud mouth former Democrat now closet RINO Rick Perry and Texas is not top kick here, is it possible that Rick Perry is full of cow patty material?

APACHEWHOKNOWS on January 14, 2014 at 5:49 PM

For the state that reflexively voted for Carnahans and McCaskill, MO is surprisingly solvent.

Murphy9 on January 14, 2014 at 5:50 PM

Bordering Mexico is apparently bad for solvency.

Murphy9 on January 14, 2014 at 5:51 PM

Breaking: Gov O’Malley’s new budget cuts $621 million, no tax or fee increases, and guess what: we’re selling state helicopters!

BKeyser on January 14, 2014 at 5:39 PM

Last thing he hasn’t taxed, abolished, regulated, or already sold?

Happy Nomad on January 14, 2014 at 5:57 PM

Gov. McCrory has NC moving in a better fiscal direction – but the local print media (which all lean left) excoriate him on a daily basis.

TarheelBen on January 14, 2014 at 6:01 PM

Are you kidding me? Michigan is beating Texas?

Varchild on January 14, 2014 at 6:01 PM

… while the five in the worst shape were California, Massachusetts, Illinois, Connecticut, and New Jersey coming in dead last. (Quite the red vs. blue dichotomy there, eh? Just sayin.’)


Any chance Ed can make AP write the above quote 1,000 times on the blackboard?

It might … just might … be enough to STOP the endless barrage of Chris Christie QOTD’s.

PolAgnostic on January 14, 2014 at 6:01 PM

Del Dolemonte on January 14, 2014 at 5:35 PM

#51-57, no data reported.

Christien on January 14, 2014 at 5:37 PM

Actually they are still busy translating those from the original language (Austrian).

Del Dolemonte on January 14, 2014 at 6:01 PM

And the nominees for Least Fiscally Solvent State in America, are…

A hyper Blue state!

Runner-up: a hyper blue state.

And our 3rd place winner is – surprise – a hyper blue state!

Thank you all for attending. Please leave your wallets at the door, suckers. (someone has to clean up these toddler’s wastrel ways)

locomotivebreath1901 on January 14, 2014 at 6:04 PM

California – we’re in the toilet, but at least we’re not closing the bridge.

Hey, wait…we don’t have any bridges to get out of state.

JEM on January 14, 2014 at 6:17 PM

Based on those graphs, per capita, the two strongest states are Ohio and Florida and two the worst states seems to be Maine and NEW JERSEY!

Hmmmmm.

KMav on January 14, 2014 at 6:20 PM

*crossing fingers, eyes closed*

C’mon, Illinois!

Yes!

Wait, this is bad, isn’t it?

Fallon on January 14, 2014 at 6:23 PM

The map I looked at showed the states with highest budget solvency were WISCONSIN, UTAH, Wyoming, North Dakota and Alaska??

ihasurnominashun on January 14, 2014 at 6:25 PM

ihasurnominashun on January 14, 2014 at 6:25 PM

All Democrat blue states. Typical.

Christien on January 14, 2014 at 6:31 PM

Good ol’ CA, the smartest people on the planet never fail to fail.

antipc on January 14, 2014 at 6:37 PM

Michigan is sixth in budget solvency because when the last person left, they turned off the lights. There’s no one else up there to spend money on.

NoPain on January 14, 2014 at 6:38 PM

Why does West Virginia shows 48…or am I not reading it correct. What about the Ginseng economy?

Oil Can on January 14, 2014 at 6:40 PM

This just proves Palin was terrible. NOT

tim c on January 14, 2014 at 6:58 PM

California…AKA Northern Mexico and its’ anchor baby legislature. What other outcome could there be?

repvoter on January 14, 2014 at 7:09 PM

The “deep blue” states are deepest in the red, financially speaking.

(Well, somebody had to say it.)

Their solution of course will be to have The One confiscate the state treasuries of the top 10 solvent states and give the money to the bottom 10 insolvent ones. Then transfer from the second 10 to the next ones up on the underwater list, etc.

When they get to the middle things will get interesting.

clear ether

eon

eon on January 14, 2014 at 7:23 PM

So, Texas is ranked poorly on the first one. But that is on purpose – they don’t want to spend people’s money. I don’t think is that is necessarily a good metric for “fiscal condition.” It may be, generally, because most states are cash crunched not out of choice, but of profligacy.

besser tot als rot on January 14, 2014 at 7:25 PM

Wow ….. New York, New Jersey, Pennsylvania, and Maryland are “California, east.”

listens2glenn on January 14, 2014 at 7:30 PM

Are you kidding me? Michigan is beating Texas?

Varchild on January 14, 2014 at 6:01 PM

…we have had a new governor…and he is not a demorat…and Michigan is not just Detroit and Flint!

KOOLAID2 on January 14, 2014 at 7:42 PM

#57 at dead last. needing a corpse-man.

t8stlikchkn on January 14, 2014 at 7:51 PM

Bottoms are all Repub red states. Typical.

Christien on January 14, 2014 at 5:32 PM

If this is not sarcasm then it is Stupidity on Steroids.

California – Wholly owned by the Democrat Party – in fact the reissued a Governor from the ’60s

Massachusetts – Again, Democrat central – home of Ted Kennedy and Elizabeth Warren

Illinois – Rom (dead fish) Emanual – Home of Obama – the state may be Red but that’s not U.S. politiks red.

Connecticut – where Republican should be listed as an Endangered Species.

and

New Jersey – Wait a minute, didn’t Chris Christie save them? No, that’s right he’s a RINO, he simply runs the democrat mess better than a democrat.

jaydee_007 on January 14, 2014 at 7:53 PM

R’uh-R’oh. New Jersey is dead last.

My collie says:

Chris Cristie is going to have to punish some more people for this.

CyberCipher on January 14, 2014 at 8:22 PM

Illinois – Rom (dead fish) Emanual – Home of Obama – the state may be Red but that’s not U.S. politiks red.

Even more than California or Massachusetts, Illinois’ problems start with a C and end with an O. Springfield simply dances to the Chicago rap. Illinois goes red in a hurry without Chicago.

I hate that place. Ashamed to call it my place of birth.

98ZJUSMC on January 14, 2014 at 8:29 PM

So, Texas is ranked poorly on the first one. But that is on purpose – they don’t want to spend people’s money. I don’t think is that is necessarily a good metric for “fiscal condition.” It may be, generally, because most states are cash crunched not out of choice, but of profligacy.

besser tot als rot on January 14, 2014 at 7:25 PM

We’re in a crunch b/c of so many illegals here that we have to support through Medicaid and attached programs.

I just wanna post this to see if it comes through. It’s hilarious. Not intended for anyone in particular, but appropriate for the comment about Texas being so low in the first rating……http://a.disquscdn.com/uploads/mediaembed/images/774/8357/original.jpg

avagreen on January 14, 2014 at 8:38 PM

This is misleading. Texas has a balanced budget amendment, so it keeps only a small rainy day fund of $8.2B for emergencies.

That’s right. It’s a standby fund of $8.2B. The total budget for the State is $81B, with the new budget at $94B. So, 10% sitting idle to be used for absolutely any purpose ranks Texas at number 42?

Due to this, I doubt all the numbers in this article. Someone pulled this out of his butt.

Wino on January 14, 2014 at 8:56 PM

…we have had a new governor…and he is not a demorat…and Michigan is not just Detroit and Flint!

KOOLAID2 on January 14, 2014 at 7:42 PM

Yes I know, I am from Michigan. I never realized how good a job Rick Snyder has actually done with the budget until seeing us ahead of Texas and many other states.

Oh and “Demorat” was definitely not a misspelling, I hope.

Varchild on January 14, 2014 at 10:07 PM

jaydee_007 on January 14, 2014 at 7:53 PM

Of course, it was obviously sarcasm–with the specific intent of eliciting the truth from another reader. I set ‘em up; you knock ‘em down. That’s how it works.

Christien on January 15, 2014 at 12:34 AM

He meant “Dumbocrat”, not “Demorat.”

NoPain on January 15, 2014 at 12:38 AM

MT may be in the top 5, but that’s because the dem governors wouldn’t reduce the property taxes after the bust and values dropped. We’re still paying top dollar to prop up the teachers union and state workers pensions. We could use an R gov like Walker for awhile. There’s fees, taxes and permits for everything we do except breathe and that may be next.

Kissmygrits on January 15, 2014 at 9:45 AM

I just wanna post this… http://a.disquscdn.com/uploads/mediaembed/images/774/8357/original.jpg

avagreen on January 14, 2014 at 8:38 PM

You had to trayspass to git that there picture of me, huh.

Tsar of Earth on January 15, 2014 at 1:27 PM