Mississippi

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Summary

On the basis of its fiscal solvency in five separate categories, Mississippi ranks 32nd among the US states and Puerto Rico for its fiscal health. On a cash basis, Mississippi has between 2.37 and 3.04 times the cash needed to cover short-term liabilities. Revenues exceed expenses by 3 percent, producing a surplus of $174 per capita. On a long-run basis, net assets are 6 percent of total assets, and total liabilities account for 26 percent of total assets. Total debt is $5.42 billion. Unfunded pension liabilities are $51.65 billion on a guaranteed-to-be-paid basis. Other postemployment benefits (OPEB) add $762 million in unfunded liabilities. These three liabilities are equal to 56 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. (Mississippi ranks 19th.)
  • 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 29th.)
  • 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 29th.)
  • 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 41st.)
  • 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? (Mississippi ranks 47th.)

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