For those on the left who want to make the case that the Republicans tossed our state in a hole over the last few years, I humbly yield to the findings of the good folks at George Mason University’s Mercatus Center:
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 and Puerto Rico 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 much debt does a state have? How large are its unfunded pension and healthcare liabilities?
In 2015, North Carolina ranked 27th in the nation in terms of overall fiscal solvency. In 2016, the state came in at 21st. The state in the best shape for 2016? Alaska. The worst? Connecticut, whose governor has been all over North Carolina campaigning for Roy Cooper and bashing Pat McCrory. Here’s more:
[…] To be considered a “big mover,” a state must have shifted position by more than five spots between the 2015 and 2016 editions (which use the latest available data, from fiscal years 2013 and 2014, respectively). A change in ranking of five or fewer places is not considered a significant change in the underlying metrics.
For the most part, states’ overall fiscal performance remained relatively constant. Only Delaware and Iowa dropped significantly in the overall ranking of fiscal condition. But there were big movers in each of the five categories that make up the overall ranking:
- Colorado, Delaware, New Mexico, and Iowa all moved down in the ranking of cash solvency, while Maine and Minnesota both improved.
- Sixteen states changed their ranking within the budget solvency category; six improved significantly and ten worsened. (Budget solvency is more prone to large changes in ranking than the other categories because of the fluctuation in surpluses or deficits from year to year.)
- Two states—Maine and North Carolina—experienced a significant shift in their long-run solvency ranking. Maine fell by eight spots and North Carolina improved by seven spots.
- There was little movement in the service-solvency ranking, except in the case of North Carolina, which improved its position by six places.
- Colorado and Arizona both improved their trust fund solvency ranking. Montana, New Jersey, and Washington moved down in this ranking.
It’s always good to see numbers like this going in the right direction.