On the basis of its solvency in five separate categories, Indiana ranks 21st among the US states for fiscal health. How does your state rank?
On the basis of its solvency in five separate categories, Indiana ranks 21st among the US states for fiscal health. Indiana has between 1.37 and 2.68 times the cash needed to cover short-term obligations. Revenues cover 100 percent of expenses, with a worsening net position of –$14 per capita. In the long run, Indiana has a net asset ratio of –0.13. Long-term liabilities are lower than the national average, at 50 percent of total assets, or $2,155 per capita. Total unfunded pension liabilities that are guaranteed to be paid are $67.11 billion, or 23 percent of state personal income. OPEB are$0.34 billion, or less than 1 percent of state personal income.
Cash solvency measures whether a state has enough cash to cover its short-term bills, which include accounts payable, vouchers, warrants, and short-term debt. (Indiana ranks 27th.)
Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Indiana ranks 36th.)
Long-run solvency measures whether a state has a hedge against large long-term liabilities. Are enough assets available to cushion the state from potential shocks or long-term fiscal risks? (Indiana ranks 31st.)
Service-level solvency measures how high taxes, revenues, and spending are when compared to state personal income. Do states have enough “fiscal slack”? If spending commitments demand more revenues, are states in a good position to increase taxes without harming the economy? Is spending high or low relative to the tax base? (Indiana ranks 18th.)
Trust fund solvency measures how much debt a state has. How large are unfunded pension liabilities and OPEB liabilities compared to the state personal income? (Indiana ranks 5th.)
For a complete explanation of the methodology used to calculate Indiana's fiscal health rankings, download the full paper and the dataset at mercatus.org/statefiscalrankings.