July 11, 2017

#29 | Ranking the States by Fiscal Condition: Wisconsin

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On the basis of its fiscal solvency in five separate categories, Wisconsin is ranked 29th among the US states for its fiscal health. On a short-run basis, Wisconsin has between 97 percent and 196 percent of the cash needed to cover short-term obligations. Revenues exceed expenses by 4 percent, and net position improved by $227 per capita in FY 2015. On a long-run basis, Wisconsin has a slightly negative net asset ratio of 0.02. Long-term liabilities are 36 percent of total assets, or $2,693 per capita. Total primary government debt is $13.69 billion, or 5.2 percent of state personal income. Wisconsin’s ranking for trust fund solvency is among the highest in the country. Unfunded pension obligations, on a guaranteed-to-be-paid-basis, are $47.74 billion, or 18 percent of state personal income. OPEB is 0.34 percent of state personal income.

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Key Terms

  • 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. (Wisconsin ranks 38th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Wisconsin ranks 27th.)
  • 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? (Wisconsin ranks 27th.)
  • 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? (Wisconsin ranks 30th.)
  • 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? (Wisconsin ranks 5th.)

For a complete explanation of the methodology used to calculate Wisconsin's fiscal health rankings, download the full paper and the dataset at mercatus.org/statefiscalrankings

To read all our work on Wisconsin, go to mercatus.org/states/wisconsin.