Georgia

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Summary

On the basis of its fiscal solvency in five separate categories, Georgia ranks 23rd among the US states and Puerto Rico for its fiscal health. On a cash basis, Georgia has between 1.64 and 2.52 times the cash to cover short-term liabilities. Revenues exceed expenses by 3 percent, producing a per capita surplus of $150. Net assets are 6 percent of total assets, and total liabilities account for 38 percent of total assets. Total debt is $14.62 billion. Unfunded pension liabilities are $95.30 billion on a guaranteed-to-be-paid basis, and other postemployment benefits (OPEB) add $11.14 billion to unfunded liabilities. These three liabilities are equal to 31 percent of total state personal income. 

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. (Georgia ranks 26th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Georgia ranks 30th.)
  • 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? (Georgia 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? (Georgia ranks 13th.)
  • 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? (Georgia ranks 21st.)

For a complete explanation of the methodology used to calculate Georgia's fiscal health rankings, download the full paper and the dataset at mercatus.org/statefiscalrankings-2016-edition.