Kansas

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Summary

On the basis of its fiscal solvency in five separate categories, Kansas ranks 27th among the US states and Puerto Rico for its fiscal health. On a cash basis, Kansas has between 1.24 and 2.22 times the cash needed to cover short-term liabilities. Revenues exceed expenses by 1 percent, producing a surplus of $27 per capita. On a long-run basis, net assets are 12 percent of total assets, and total liabilities account for 23 percent of total assets. Total debt is $3.96 billion. Unfunded pension liabilities are $33.97 billion on a guaranteed-to-be-paid basis, and other postemployment benefits (OPEB) add $261 million in unfunded liabilities. These three liabilities are equal to 29 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. (Kansas ranks 31st.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Kansas ranks 38th.)
  • 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? (Kansas ranks 21st.)
  • 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? (Kansas ranks 11th.)
  • 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? (Kansas ranks 25th.) 

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