July 11, 2017

#34 | Ranking the States by Fiscal Condition: Mississippi

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On the basis of its fiscal solvency in five separate categories, Mississippi is ranked 34th among the US states for its fiscal health. On a short-run basis, Mississippi has between 2.20 and 2.80 times the cash needed to cover short-term obligations. Revenues exceed expenses by 2 percent, and net position improved by $135 per capita in FY 2015. On a long-run basis, Mississippi has a net asset ratio of −0.06. Long-term liabilities are 36 percent of total assets. Total primary government debt is $5.53 billion, or 5.2 percent of state personal income, higher than the average in the states of 3.7 percent. Mississippi’s weakest ranking is for trust fund solvency; in this category, Mississippi ranks among the lowest of the states. Unfunded pension obligations, on a guaranteed-to-be-paid basis, are $61.15 billion, or 58 percent of state personal income. OPEB is 1 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. (Mississippi ranks 23rd.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Mississippi 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? (Mississippi ranks 30th.)
  • 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? (Mississippi ranks 43rd.)
  • 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? (Mississippi ranks 47th.)

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

To read all our work on Mississippi, go to mercatus.org/states/mississippi.