A decade after the worst financial crisis in modern American history, two separate analyses of government finances have found that most states are better prepared to weather the next recession, Governing reports.
But some of the least prepared governments—including Louisiana, Illinois, New Jersey and Pennsylvania—have repeatedly struggled to balance budgets, even as the economy has recovered. But even among these states, some will be hit worse than others, says Dan White, a director at Moody’s Analytics.
S&P Global Ratings and Moody’s Analytics have concluded that a majority of states have either adequate funds or almost enough to make it through the next recession without the massive layoffs and draconian cuts governments had to resort to following the 2008 global financial crisis.
But both firms also discovered a disturbing trend: A subset of states have continued to struggle and remain worse-off than they were a decade ago. “All else equal, this is going to result in a faster recovery [compared with 2008] among the states that are most prepared,” White says. “What’s troubling, though, is we’re seeing an increasing gap between the have and have-nots.”
A total of 20 states have enough in reserves to get through a downturn comfortably, according to S&P. Moody’s found that 23 states are well-positioned when including other funds available to buffer the budget.
