Some of America’s states are not exactly in the best fiscal shape.
That’s where financial watchdogs like Truth in Accounting come in to set the record straight.
For this year, Truth in Accounting recently released the 11th edition of its Financial State of the States report. These reports have been a pillar of their fiscal research. The 2020 edition brought light to the fiscal health of the 50 states before the Wuhan virus pandemic. The 2021 edition will look very intriguing due to the fiscal upheaval that the Wuhan virus lockdowns have created.
Robert Wenzel of Economic Policy Journal gave a brief synopsis of some of the most notable findings in this report:
The report found that 39 states did not have enough money to pay all of their bills. Most of the states were ill-prepared for any crisis, much less one as severe as massive lockdowns of state economies.
Top Ten States in the Worst Financial Condition
- 50. New Jersey
- 49. Illinois
- 48. Connecticut
- 47. Hawaii
- 46. Massachusetts
- 45. Delaware
- 44. Kentucky
- 43. California
- 42. Vermont
- 41. New York
Top Ten States in the Best Financial Condition
- 1. Alaska
- 2. North Dakota
- 3. Wyoming
- 4. Utah
- 5. Tennesse
- 6. South Dakota
- 7. Nebraska
- 8. Idaho
- 9. Oregon
- 10. Iowa
Truth in Accounting has done a fantastic job in showing the disparate fiscal policies states across the nation pursue. Generally speaking, blue states and urban centers tend to be the most fiscally profligate.
For example, cities like New York and Chicago, have a per capita debt burden of $63,100 and $37,100, respectively. Most of these cities are known for their leftist polices, which feature big spending among other leftist hobby horses.
Although these rankings are alarming, there are other states with more fiscally responsible policies. Therein lies the virtues of the American political system. Federalism allows for states to compete with each other on policymaking. If Americans are fed up with their local or state governments’ fiscal policies, they can pack up and leave to more fiscally sane states.
Several states such as Arizona and Texas have largely benefited from blue states’ economic misbehavior and have received increasing number of transplants in the last decade.
Hopefully, these transplants don’t bring the politics that turned their states into trash heaps with them.
Truth in Accounting’s report can be read here.