July 14, 2015

Is Your State in Poor Fiscal Health?

Adam Millsap

Assistant Director, L. Charles Hilton Jr. Center for the Study of Economic Prosperity and Individual Opportunity, Florida State University
Summary

State fiscal health: It may not sound like the most exciting topic, but knowing a little bit about the fiscal health of the states can help people answer questions that impact their everyday lives. For example, is it likely that your state will need to raise taxes in the future in order to pay its bills? Does your state have enough cash in its rainy day fund to soften the blow of another economic downturn? If you're a state or local government worker, will your state be able to pay the full pension it promised you?

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State fiscal health: It may not sound like the most exciting topic, but knowing a little bit about the fiscal health of the states can help people answer questions that impact their everyday lives. For example, is it likely that your state will need to raise taxes in the future in order to pay its bills? Does your state have enough cash in its rainy day fund to soften the blow of another economic downturn? If you're a state or local government worker, will your state be able to pay the full pension it promised you?

These are important questions for taxpayers, business owners and state and local government employees to ask. Unfortunately, coming up with answers is not easy. State finance reporting is shrouded in esoteric language, and variations in the way states self-report their finances make it difficult to compare them to one another in order to identify the relatively healthy ones.

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