October 9, 2018

#5 | Ranking the States by Fiscal Condition: Oklahoma

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On the basis of its solvency in five separate categories, Oklahoma ranks 5th among the US states for fiscal health. Oklahoma has between 2.06 and 2.67 times the cash needed to cover short-term obligations. Revenues only cover 96 percent of expenses, with a worsening net position of –$171 per capita. In the long run, Oklahoma has a net asset ratio of 0.31. Long-term liabilities are lower than the national average, at 11 percent of total assets, or $609 per capita. Total unfunded pension liabilities that are guaranteed to be paid are $63.16 billion, or 35 percent of state personal income. OPEB are $0.01 billion, or less than 1 percent of state personal income.Share this

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. (Oklahoma ranks 20th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Oklahoma ranks 41st.)
  • 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? (Oklahoma ranks 3rd.)
  • 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? (Oklahoma ranks 11th.)
  • 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? (Oklahoma ranks 1st.)

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

To read all our work on Oklahoma, go to mercatus.org/states/oklahoma.