We're Number 44! We're Number 44!
By David Henderson
I’ve been looking at the pictures on the Mercatus web site for a study titled “Ranking the States by Fiscal Condition.” It’s by Mercatus Center senior research fellow Eileen Norcross and was released two days ago.
Just aesthetically, the pictures are beautiful. More important, they communicate the measures nicely. Here’s the abstract:
Based on the fiscal year 2013 Comprehensive Annual Financial Reports of the 50 states, this study ranks states’ fiscal solvency using 14 metrics that assess whether the states can meet their short-term bills and long-term obligations. State finances are analyzed according to five dimensions of solvency: cash, budget, long-run, service-level, and trust fund. These five dimensions are combined to produce an overall ranking of state fiscal solvency.
So, of course, an immediate question to ask is: Overall which states are in the best fiscal shape and which are in the worst?
The five best, from first to fifth, are:
The five worst, from 50th to 46th, are:
Of course, I was most interested in the state I live in: California.
California is 44th best or 7th worst.
Although Norcross doesn’t point it out in the study, an editorial in the Investor’s Business Daily pointed out an interesting political pattern. The editorial is titled “Red States Outperform Blue In Managing Taxpayer Money.”
The editors write:
There’s only one factor these fiscal winners and losers share in common. And that’s their political leanings. Of the top 10 states in the Mercatus ranking, just two — Florida and Ohio — voted for the Democratic presidential candidate in the past four elections, and just one — Montana — has a Democratic governor. Even if you look at the 25 best-performing states, only three could be considered reliably liberal.
At the other end of the list, just two of the 10 lowest-ranked states — Kentucky and West Virginia — have voted for the Republican in the past four presidential elections. And while four of them have Republican governors, they all are in solid blue states and all were elected to clean up messes left by their Democratic predecessors.
This is more evidence for a claim I made last month: contrary to what George Wallace said, there is more than a dime’s worth of difference between Democrats and Republicans.