We’re No. 18! We’re No. 18!

Virginia has the 18th strongest fiscal condition of the 50 states and Washington, D.C., according to the 2017 edition of the Mercatus Center’s “Ranking of the State by Fiscal Condition.” The ranking is based on 13 measures of fiscal solvency, ranging from cash on hand to unfunded pension liabilities.

The overall ranking integrates measures for five broad categories based on fiscal 2016 data. These include (listed in the order of Virginia’s performance):

Service-level solvency. Virginia scores 4th best in the nation for this set of measures indicating how much “fiscal slack,” or leeway, a state has to raise taxes or increase spending. States with low levels of taxes, revenues, and expenses as a percentage of personal income are ranked the highest. 

Trust fund solvency. Virginia also scores well for this category, 11th, which reflects exposure to pension risks and other post-retirement benefits. 

Long-run solvency. Virginia scores 16th for long-run solvency, a set of measures capturing a state’s ability to meet its long-term liabilities.

Cash solvency. Virginia ranks 27th by this set of measures indicating a state’s ability to meet short-term liabilities.

Budget solvency. Virginia ranks 31st for this composite of two measures indicating whether a state’s revenues match its expenses.

Virginia’s ranking slipped from 15th place the previous year — not a good sign.

But if it’s any consolation, CNBC has just rates Virginia as the 7th best state to do business.

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5 responses to “We’re No. 18! We’re No. 18!

  1. Fascinating to see the top 5: Florida, the Dakotas, Utah and Wyoming. One thinks energy production and the associated regulations might be a factor, no?

    • Surely energy production is a factor — Utah, Wyoming and the Dakotas are flush with cash. That makes Florida’s No. 1 ranking all the most impressive, because it is not an energy producer (unless you count solar). Florida’s fiscal strength is all the more amazing when you consider that it does not have an income tax. I would like to know how they do it.

      But the energy-producing states deserve some credit for not squandering their wealth. The oil and gas boom has subsided in the last couple of years, yet these states still rate high.

  2. Pingback: Virginia is Economically Relevant Again...Or Are We? - Bearing Drift

  3. “I would like to know how they do it.”
    If you’ve ever visited the mouse, you’re helping fund Florida state revenues. Sales and gross receipts taxes account for 81% of state taxes collected compared to 48% nationally.

  4. Florida “does it” with sale taxes (consumption tax) and road tolls… and plain old fiscal conservatism…not spending more than they can afford…

    … unlike Connecticut and Hartford …these days.. Harford on the brink of bankruptcy… they finally taxed too much…

    Florida has the right approach… tax consumption..not property or income. ” Florida (FL) Sales Tax Rates by City. The state sales tax rate in Florida is 6.000%. With local taxes, the total sales tax rate is between 6.000% and 8.000%”

    http://www.sale-tax.com/Florida

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