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On the basis of its fiscal solvency in five separate categories, Oklahoma ranks eighth among the US states and Puerto Rico for its fiscal health. On a cash basis, Oklahoma has between 3.09 and 3.79 times the cash needed to cover short-term liabilities. Revenues exceed expenses by 5 percent, producing a surplus of $260 per capita. Net assets are 37 percent of total assets, and total liabilities are 11 percent of total assets. Total debt is $2.37 billion. Unfunded liabilities are $41.65 billion on a guaranteed-to-be paid basis. Together, debt and unfunded pension liabilities are equal to 26 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. (Oklahoma ranks 13th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Oklahoma ranks 16th.)
  • 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? (Oklahoma ranks 5th.)
  • 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? (Oklahoma ranks 15th.)
  • 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? (Oklahoma ranks 2nd.)

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