“State fiscal condition is multifaceted and difficult to measure,” wrote Dr. Sarah Arnett, a graduate of Georgia State University and analyst at the Government Accountability Office (GAO). “Using a method developed in previous research, I create the cash, budget, long-run, and service-level solvency indices using
fiscal year 2012 data to measure the dimensions of fiscal condition.”
Georgia ranks 30th in cash solvency, 36th in budget solvency, 32nd in long-run solvency, according to the paper. The state ranks 8th in service-level solvency, which is measured using taxes and revenue per capita, along with expenditures per capita.
In terms of overall fiscal condition, which is determined by the four other solvency measures, Georgia ranks 28th. Here’s the full ranking of states:
“The five states with the highest-ranked overall fiscal condition are Alaska, South Dakota, North Dakota, Nebraska, and Wyoming,” wrote Arnett. “The five states with the lowest-ranked fiscal condition are New Jersey, Connecticut, Illinois, Massachusetts, and California.”
“The top five states all had a surplus in fiscal year 2012 as measured by an increase in net assets, but there are differences in their underlying strengths. I find that the states with the worst fiscal condition have had years of poor financial management across the different dimensions of fiscal condition,” she added.
Correction: The Mercatus Center is based at George Mason University, not George Washington University, as an earlier version of the post stated.