Red states more fiscally responsible than blue

Sunday, June 5, 2016
 | 
Michael F. Haverluck (OneNewsNow.com)

GOP and Dems dukking it outThe latest research conducted by George Mason University’s Mercatus Center reveals that predominantly Republican states are by far the most fiscally sound, while the most heavily weighted Democratic states demonstrate the least fiscal responsibility.

The Mercatus Center study divulged that the 10 states managing their budgets best are virtually all solidly Republican, with researchers saying that “Red is the new black.” A state’s “solid” Republican or Democratic status is determined by voters’ selection in the last four presidential elections — with a state being solid if its party won all four contests from 2000 to 2012. Florida voted twice for a Republican candidate and twice for a Democratic candidate during that period.

Top 10 most fiscally solvent states

  1. Alaska (solidly Republican)
  2. Nebraska (solidly Republican)
  3. Wyoming (solidly Republican)
  4. North Dakota (solidly Republican)
  5. South Dakota (solidly Republican)
  6. Florida (partially Republican, partially Democratic)
  7. Utah (solidly Republican)
  8. Oklahoma (solidly Republican)
  9. Tennessee (solidly Republican)
  10. Montana (solidly Republican)

10 least fiscally solvent states

  1. Connecticut (solidly Democratic)
  2. Massachusetts (solidly Democratic)
  3. New Jersey (solidly Democratic)
  4. Illinois (solidly Democratic)
  5. Kentucky (solidly Republican)
  6. Hawaii (solidly Democratic)
  7. California (solidly Democratic)
  8. Maine (solidly Democratic)
  9. New York (solidly Democratic)
  10. Maryland (solidly Democratic)

Examining the results

There was just one paradox in this year’s study on financial responsibility.

With solid red Kentucky moving into the bottom five this year — and being the one exception to Republican states proving themselves to be the most financially responsible — most of the fiscal irresponsibility was found in solidly blue states.

The study searched for several financial factors to distinguish the fiscal winners from the losers.

“[T]he reports focused on a state’s ability to pay its bills, manage long-term budget commitments, and whether they can adapt to sudden increase of spending in instances of emergency,” Townhall reports. “Cash solvency, for example, measures a state’s ability to pay its immediate bills, [while] budget solvency measures whether states will end the year with a surplus or deficit. Long-run solvency looks at a state’s ability to meet long-term spending commitments. Service-level solvency measures a state’s ability to respond to a demand for increased spending. And trust fund solvency measures unfunded pension liabilities and state debt.”

Extremes

Even though some states registered with a high overall score, their handling of financial matters often fluctuate greatly in different areas.

“Alaska … ranks at the top for cash, budget and long-run solvency, but near the bottom on the other two measures,” Townhall’s Matt Vespa pointed out. “Ohio ranks fifth in cash solvency, but 48th on trust fund solvency.”

Mopping up the bottom

A newcomer to Mercatus’ research this year was Puerto Rico, which has been in the news recently about its request for a bailout over its mismanaged finances. Unsurprisingly, it finished at the very bottom on every measure in the study.

When it came to the five states that were worst at managing their finances, research showed that the major culprit was unfunded liabilities. For the most part, these financially irresponsible states remained static since last year, with New York being the exception by bouncing out of the bottom five.

“Kentucky, Illinois, New Jersey, Massachusetts, and Connecticut rank in the bottom five states, largely owing to the low amounts of cash they have on hand and their large debt obligations,” Mercatus reported.

Putting up slightly worse numbers than than last year, Connecticut and Massachusetts were unable to leave the bottom five. Researchers also noted that even though New Jersey and Illinois made slight improvements fiscally since last year, they were still unable to escape the five states at the bottom of the barrel.

Analyzing the bottom five states even further, it was found that massive debt obligations plagued every one.

“Each of the bottom five states exhibits serious signs of fiscal distress,” Vespa noted. “Though the states’ economies may be stronger than Puerto Rico’s — allowing them to better navigate fis­cal crises — their liabilities still raise serious concerns.”

Another huge factor pushing blue states to the bottom of the list is unfunded liabilities.

“High deficits and debt obligations in the forms of unfunded pensions and healthcare benefits continue to drive each state into fiscal peril,” he continued. “Each holds tens, if not hundreds, of billions of dollars in unfunded liabilities — constituting a significant risk to taxpayers in both the short and the long term.”

Comments

We moderate all reader comments, usually within 24 hours of posting (longer on weekends). Please limit your comment to 300 words or less and ensure it addresses the article - NOT another reader's comments. Comments that contain a link (URL), an inordinate number of words in ALL CAPS, rude remarks directed at other readers, or profanity/vulgarity will not be approved. More details

FEATURED PODCAST

SIGN UP FOR OUR DAILY NEWSBRIEF

SUBSCRIBE

VOTE IN OUR POLL

What angers you most after witnessing a week of rioting, arson, and looting? (Choose up to two)

CAST YOUR VOTE

GET PUSH NOTIFICATIONS

SUBSCRIBE

LATEST AP HEADLINES

Unemployment rate falls to 13.3%, US adds 2.5 million jobs
Detained US Navy veteran freed by Iran as part of deal
Districts jettison school police officers amid protests
Raw feelings abound as Senate turns back to Russia probe
9 firefighters hospitalized in Florida after ship explosion

LATEST FROM THE WEB

4 reasons the 'collective culpability' racket is dangerous
The black and white of 'systemic racism'
Drew Brees should indeed apologize, to all of us who believed he had a spine
As rioters destroy New York, cops kick Jewish families out of a playground
Local prosecutor lets all St. Louis rioters and looters out of jail

CARTOON OF THE DAY

Cartoon of the Day
NEXT STORY
Wage hike just a bad step for nation's capital

U.S. Capitol 620x300Washington, DC, has joined the list of places wanting a $15-an-hour minimum wage – but the city is still reeling from the wage that is being replaced.