Massachusetts ranks 48th among US states for its fiscal health, based on its fiscal solvency in five separate categories.

How Does Massachusetts Compare to Other States?

Massachusetts ranks 48th among US states for its fiscal health, based on its fiscal solvency in five separate categories.

Massachusetts’ poor fiscal ranking in FY 2013 was driven by several factors. The state’s cash position was weak, with barely sufficient cash available to cover short-term liabilities. Revenues fell short of expenses, and the state registered a small deficit. On a long-run basis, Massachusetts’ liabilities exceeded total assets by 47 percent. The state also carried a higher level of bonded debt than the national average. Unfunded pension liabilities were significant at more than $89 billion, close to three times the state’s estimates.

See “Ranking the States by Fiscal Condition” for a complete explanation of the methodology used to calculate Massachusetts’s fiscal health rankings.

1. Massachusetts ranks 47th in terms of cash solvency.

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. Massachusetts’ cash position was weak. In FY 2013 it had only 48 percent of the most liquid forms of cash on hand to pay for short-term liabilities. When including less liquid forms of cash, Massachusetts could cover its short-term liabilities, but it was far below the national average of two to three times the amount of cash needed to cover short-term obligations.


Cash ratio

Quick ratio

Current ratio





National average




2. Massachusetts ranks 48th in terms of budget solvency.

Budget solvency measures whether a state can cover its fiscal year spending out of current revenues. Did it run a shortfall during the year? A negative operating ratio indicates Massachusetts did not have sufficient revenues to cover expenses during FY 2013, and it ran a deficit of $171 per capita. 


Operating ratio

Surplus (deficit) per capita




National average



3. Massachusetts ranks 48th in terms of long-run solvency.

Long-run solvency measures whether a state has a hedge against large long-term liabilities. Are there enough assets available to cushion the state from potential shocks or long-term fiscal risks? Massachusetts’ negative net asset ratio indicates the state did not have sufficient assets to cover long-term liabilities in FY 2013. (Net assets are those left over after the government has paid its debts. They are a subset of total assets, which also include capital and government buildings. The net asset ratio measures the total of restricted and unrestricted assets, or net assets, as a portion of total assets.) The state’s long-term liability ratio was high, with liabilities exceeding assets by 47 percent. Long-term liabilities per capita were more than double the national average at $5,947.


Net asset ratio

Long-term liability ratio

Long-term liability per capita





National average




4. Massachusetts ranks 31st in terms of service-level solvency.

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? Massachusetts’ total taxes were 6 percent of personal income in FY 2013. Total revenues as a proportion of state personal income were more than double the of the tax to income ratio, indicating the state relied on nontax sources of revenue to cover spending in FY 2013.


Tax to income ratio

Revenues to income ratio

Expenses to income ratio





National average




5. Massachusetts ranks 22nd in terms of trust fund solvency.

Trust fund solvency measures how much debt a state has. How large are unfunded pension liabilities, other postemployment benefits (OPEB) liabilities, and state debt compared to the state personal income? Massachusetts’ unfunded pension liabilities, when calculated on a guaranteed-to-be-paid basis, accounted for 23 percent of the total state personal income. (Pension benefits are recalculated based on a discount rate of 3.38 percent to account for the government’s guarantee to pay employees earned benefits.) Unfunded OPEB represented 4 percent of personal income, and total bonded indebtedness accounted for a further 7 percent of total state income, higher than the national average of 4 percent. 


Pension to income ratio

OPEB to income ratio

Debt to income ratio





National average




State debt 

State debt is calculated from each state’s Comprehensive Annual Financial Report. Massachusetts’ total bonded indebtedness amounted to $25 billion in FY 2013, accounting for 6.6 percent of the total state personal income, or $3,810 per capita. 

General obligation bonds

Total primary government debt

State personal income

Ratio of debt to state personal income

Total primary debt per capita


$25.25 billion

$25.32 billion

$383.15 billion



National average

$6.08 billion

$12.60 billion

$282.05 billion



Pension liability 

Pension liability is calculated from each state’s pension actuarial reports. Massachusetts’ total unfunded liability for its state pension plans was more than $89 billion when calculated on a guaranteed-to-be-paid basis, nearly three times larger than the state’s estimate.

Unfunded pension liability

Funded ratio

Market value of unfunded liability (risk-adjusted discount rate)

Market value of funded liability ratio


$26.42 billion


$89.91 billion


National average

$19.85 billion


$78.79 billion


OPEB liability 

OPEB liability is calculated from each state’s Comprehensive Annual Financial Report. Unfunded OPEB liabilities in Massachusetts totaled $15 billion and were 3 percent funded, leaving the system on a largely pay-as-you-go basis. 


Total unfunded OPEB liability

Funded ratio


$15.38 billion


National average

$10.84 billion