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On the basis of its fiscal solvency in five separate categories, Arizona ranks 31st among the US states and Puerto Rico for its fiscal health. On a short-run basis, Arizona’s performance is mixed. The state has low levels of cash, or between 0.84 and 1.33 times the cash needed to cover short-term liabilities. Revenues exceed expenses by 5 percent, with a small surplus of $231 per capita. On a long-run basis, net assets are 15 percent of total assets, and total liabilities account for 26 percent of total assets. Arizona has $10.07 billion in total debt, with unfunded pension liabilities valued at $72.16 billion on a guaranteed-to-be-paid basis. 

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. (Arizona ranks 45th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Arizona ranks 21st.)
  • 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? (Arizona ranks 22nd.)
  • 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? (Arizona ranks 19th.)
  • Trust fund solvency measures how much debt a state has. How large are unfunded pension liabilities, OPEB liabilities, and state debt compared to the state personal income? (Arizona ranks 17th.)

For a complete explanation of the methodology used to calculate Arizona’s fiscal health rankings, download the full paper and the dataset at