North Carolina

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On the basis of its fiscal solvency in five separate categories, North Carolina ranks 21st among the US states and Puerto Rico for its fiscal health. On a cash basis, North Carolina has between 0.93 and 2.09 times the cash needed to cover short-term liabilities. Revenues exceed expenses by 10 percent, producing a surplus of $401 per capita. On a long-run basis, North Carolina has no assets remaining after paying for debts. It also has a low long-term liability ratio, with total liabilities accounting for 19 percent of total assets. Total debt is $8.59 billion. Unfunded pension liabilities are $72.50 billion on a guaranteed-to-be-paid basis, and other postemployment benefits (OPEB) are $25.64 billion. These three liabilities are equal to 28 percent of 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. (North Carolina ranks 37th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (North Carolina ranks 8th.)
  • 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? (North Carolina ranks 17th.)
  • 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? (North Carolina ranks 18th.)
  • 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? (North Carolina ranks 8th.)

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