fiscal ranking by state

In new research for the Mercatus Center at George Mason University, Senior Research Fellow Eileen Norcross ranks each US state’s financial health based on short- and long-term debt and other key fiscal obligations, including unfunded pensions and health care benefits. We take the information from her report as it applies to five of the 2016 Republican candidates for President.

We understand the conventional wisdom that a Governor already has executive experience and leadership skills dealing with a State’s bureaucracy and State Legislature the other candidates do not have. The problem with a blanket statement like that is not every Governor is the same, and not every Governor can run for President by trumpeting their triumphs as Governor.

Previously we wrote a column about how 8 Governors want to be our next President. It was comprised of Cato Institute Governor’s Scorecards from 2006 through 2014. This column is about how the five current or recently retired Governors fared on the just released Mercatus Center’s newest research.

The report starts out by asking 5 questions about different types of fiscal solvency:

  • Budget solvency. Can a state cover its fiscal year spending with current revenues? Or does it have a budget shortfall?
  • Trust fund solvency. How much debt does a state have? How large are its unfunded pension and health care liabilities?
  • 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?
  • Cash solvency. Does a state have enough cash on hand to cover its short-term bills?
  • Service-level solvency. How much fiscal “slack” does a state have to increase spending should citizens demand more services?
  • We decided to make a split of being one of the States ranked #1 through #25 as the top half or one of the states ranked #26 through #50 as the bottom half. We also decided that the answers to the first two questions are more important than the last three.

  • Texas is in the top 25 in 4 categories and in the bottom 25 in 1 category
  • Wisconsin is in the top 25 in 2 categories and in the bottom 25 in 3 categories
  • Louisiana is in the top 25 in 2 categories and in the bottom 25 in 3 categories
  • Ohio is in the top 25 in 2 categories and in the bottom 25 in 3 categories
  • New Jersey is in the top 25 in 1 category and in bottom 25 in 4 categories
  • IN THE TOP 25 RANKING OF STATES BY BUDGET SOLVENCY (FY 2013)
    #8 Rick Perry Texas
    #11 Scott Walker Wisconsin

    IN THE BOTTOM 25 RANKING OF STATES BY BUDGET SOLVENCY (FY 2013)
    #32 John Kasich Ohio
    #49 Bobby Jindal Louisiana
    #50 Chris Christie New Jersey

    IN THE TOP 25 RANKING OF STATES BY TRUST FUND SOLVENCY (FY 2013)
    #3 Scott Walker Wisconsin
    #12 Rick Perry Texas

    IN THE BOTTOM 25 RANKING OF STATES BY TRUST FUND SOLVENCY (FY 2013)
    #30 Chris Christie New Jersey
    #37 Bobby Jindal Louisiana
    #48 John Kasich Ohio

    IN THE TOP 25 RANKING OF STATES BY LONG-RUN SOLVENCY (FY 2013)
    #16 Rick Perry Texas

    IN THE BOTTOM 25 RANKING OF STATES BY LONG-RUN SOLVENCY (FY 2013)
    #34 Bobby Jindal Louisiana
    #37 John Kasich Ohio
    #38 Scott Walker Wisconsin
    #50 Chris Christie New Jersey

    IN THE TOP 25 RANKING OF STATES BY CASH SOLVENCY (FY 2013)
    #4 John Kasich Ohio
    #24 Bobby Jindal Louisiana

    IN THE BOTTOM 25 RANKING OF STATES BY CASH SOLVENCY (FY 2013)
    #33 Rick Perry Texas
    #38 Chris Christie New Jersey
    #41 Scott Walker Wisconsin

    IN THE TOP 25 RANKING OF STATES BY SERVICE-LEVEL SOLVENCY (FY 2013)
    #9 Rick Perry Texas
    #18 Bobby Jindal Louisiana
    #19 John Kasich Ohio
    #20 Chris Christie New Jersey

    IN THE BOTTOM 25 RANKING OF STATES BY SERVICE-LEVEL SOLVENCY (FY 2013)
    #34 Scott Walker Wisconsin

    Notably, nearly all states have unfunded pension liabilities that are large relative to state personal income, indicating that all states need to take a closer look at their unfunded pensions, which represent a significant portion of each state’s economy.

    Scott Walker Wisconsin The unfunded liability is 12 percent of residents’ personal income.
    Rick Perry Texas The unfunded liability is 20 percent of residents’ personal income.
    Chris Christie New Jersey The unfunded liability is 27 percent of residents’ personal income.
    Bobby Jindal Louisiana The unfunded liability is 31 percent of residents’ personal income.
    John Kasich Ohio The unfunded liability is 52 percent of residents’ personal income.

    pilgrim

    I am retired after 36 years of being a state of Indiana employee. I enjoy writing and reading conservative blogs.