National Taxpayers Union (NTU) commends the Mercatus Center for the publication of their latest study, Ranking the States by Fiscal Condition. Written by Senior Research Fellow Eileen Norcross, this report ranks each U.S. state’s financial health based on short and long-term debt obligations, such as unfunded pension liabilities and projected spending on health care programs. The detailed analysis of each state's own audited financial reports provides an accurate and conclusive representation of its fiscal condition. As the report notes, every state has unfunded pension liabilities that are extremely large when compared to state personal income; therefore, it is imperative that all states assess the status their unfunded pensions, which represent a large part of each state’s overall economy. Norcross applies the results of this study to answer many questions, including whether a state can cover its fiscal year spending with current revenues, and whether there will be enough money to cushion them from economic shocks or other long-term fiscal risks. NTU hopes more states will join high ranking Alaska, North Dakota, South Dakota, Nebraska, and Florida in maintaining relatively low short-term debt obligations and that future iterations of the Mercatus Center’s report will help bring attention and praise to those who do.
NTU encourages members to view the full report here.