Fiscal Report Card on the States

The full report and an executive summary on the financial health of the 50 states is available from The Pew Center on the States (click here to download). The “Top 10” states most at peril are presented in this table, and the averages for the U.S. as a whole.

 

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The Pew Center on the States (Pew) https://www.stateline.org/live/ released a report Nov. 11, 2009 that graded the financial health of all 50 states. The starting point, the gauge as it were for the report, was the budget woes of Calif., the eighth largest economy in the world.
The executive summary of the Pew Center on the States notes Calif. has “unsuccessfully sought a $7 billion federal loan guarantee to pay its bills, temporarily issued IOUs to state employees and business contractors because it ran short of cash, and started shutting state offices several Fridays a month to close the largest state budget gap in the country. The same housing-market bust that triggered the national recession in December 2007 also set off the Golden State’s fiscal crisis. But a challenging mix of economic, money-management and political factors has pushed California to the brink of insolvency.”

Pew scored all 50 states according to six factors that contributed substantially to California’s ongoing financial crisis:
1. high foreclosure rates
2. increasing joblessness
3. loss of state revenues
4. relative size of budget gaps
5. legal obstacles to balanced budgets—specifically, a supermajority
    requirement for some or all tax increases or budget bills
6. poor money-management practices.

The report notes “California’s problems are in a league of their own, but the same pressures that drove it toward fiscal disaster are wreaking havoc in a number of states, with potentially damaging consequences for the entire country.”

Those states, other than Calif., “at risk of fiscal calamity” are Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode  Island and Wisconsin.

Data for the report from the Pew Center on the States was based on “the best available data as of July 31, 2009,” i.e., the first two quarters of 2009.