A new ranking of each state’s financial health based on short- and long-term debt, as well as other key fiscal obligations including unfunded pensions and health care benefits, places Louisiana at No. 35 in the nation.
Public policy research group The Mercatus Center at George Mason University compiled the report and rankings by looking at states’ basic financial data on revenues, expenditures, cash, assets, liabilities and debt. The rankings are based on planned spending in fiscal year 2013, the most recent year for which data for all states was available.
Overall rankings are compiled based on the states’ fiscal solvency in five categories: cash solvency (cash on hand for short-term bills); budget solvency (a budget shortfall or surplus); long-run solvency (ability to meet long-term spending commitments and absorb economic shocks); service-level solvency (amount of fiscal “slack” to increase spending if more services are needed); and trust fund solvency (total debt and unfunded liabilities for pensions and health care).
Louisiana ranks best in the service-level solvency category, at No. 18, and worst in terms of budget solvency, at No. 49. Its standing in the cash solvency category is No. 24, while the state is ranked No. 34 for long-run solvency and No. 37 for trust fund solvency.
“Most states are nearly back to normal since the Great Recession, although there are troubling signs that many states are still ignoring the risks on their books, mainly in underfunded pension and health care benefits,” the report concludes. “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.”
The top five ranked states in the report are Alaska, North Dakota, South Dakota, Nebraska and Florida. Illinois is at the bottom of the rankings at No. 50, preceded by New Jersey, Massachusetts, Connecticut and New York.
Access the complete report and see the specific info for Louisiana.
—Steve Sanoski
