A new study for the Mercatus Center at George Mason University ranks each US state’s financial health based on short- and long-term debt and other key fiscal obligations, such as unfunded pensions and healthcare benefits. This 2016 edition updates the version the Mercatus Center published in 2015. Using the approach pioneered in 2015, the 2016 edition presents information from each state’s audited financial report in an easily accessible format, this time including Puerto Rico to provide a benchmark of poor fiscal performance.Out of the 50 states, California ranks #44.
Growing long-term obligations for pensions and healthcare benefits continue to strain the finances of state governments, highlighting the fact that state policymakers must be vigilant to consider both the short-term and the long-term consequences of their decisions. Understanding how each state is performing in regard to a variety of fiscal indicators can help policymakers as they consider the consequences of policy decisions.
Updating the fiscal condition of the states with another year of data shows that most states’ fiscal performance remains relatively constant, but the signs of fiscal stress persist. Underfunded pensions and healthcare benefits continue to put pressure on state finances. Even states that appear to be fiscally robust—perhaps owing to large amounts of cash on hand or revenue streams from natural resources—must take stock of their long-term fiscal health before making future public policy decisions. These fiscal pressures point to areas for policymakers to direct their efforts. They also highlight areas where improved financial reporting could give the public a clearer picture of states’ fiscal health.I know what let's do. Let's get our public employee/teacher pensions to divest from oil, tobacco, firearms, Israel--am I missing any?--because God knows we'll do anything fiscally stupid in this state.
BTW, do you notice anything in common about the top 10 states on that list? Do you notice anything in common about the bottom 10 states on that list, and throw in Puerto Rico for good measure? Hint: 10 out of the top 10 have something in common (think: color on an electoral map), and 9 of the bottom 10 or 11 have something in common (think: color on an electoral map). Just sayin'.