When it comes to the fiscal health of all 50 states, there is none healthier than the state of Florida.
Using 2015 data, the report concludes that Florida had 8.19 times the needed reserves to meet its short-term obligations. It also shows that revenue exceeds expenses by 7 percent.
“Keeping debt levels low, saving cash to pay bills and maintaining solvent budgets reflect a culture of fiscal discipline,” the report points out. “The first-place position of Florida in particular demonstrates that this is possible even with a relatively larger population and higher pension costs that arise from an aging population.”
After Florida, rounding out the top five fiscally healthy states include North Dakota, South Dakota, Utah, and Wyoming.
On the opposite end of the spectrum, the five states that ranked the worst for financial health are Maryland, Kentucky, Massachusetts, Illinois, and New Jersey placing dead last.
“Each of the bottom five states exhibits serious signs of fiscal distress,” the report points out.
While the report shows that Florida has a long-term debt of $24.6 billion, that comes out to $1211 per capita which is below the national average of $1804.
The study ranks the financial health of each state based on short- and long-term debt. It also takes into account other key fiscal obligations, such as unfunded pensions.
The report shows Florida’s pension fund had the capacity to pay 86 percent of its long-term obligations. That’s well well above the national average of 74 percent, the report showed.
This is the fourth year the Mercatus Center has ranked the states.
Florida came in sixth place in last year’s study.