October 9, 2018

#17 | Ranking the States by Fiscal Condition: Kansas

Summary

On the basis of its solvency in five separate categories, Kansas ranks 17th among the US states for fiscal health. Kansas has between 0.80 and 1.62 times the cash needed to cover short-term obligations, well below the US average. Revenues only cover 94 percent of expenses, with a worsening net position of –$283 per capita. In the long run, a net asset ratio of –0.05 indicates that Kansas does not have any assets remaining after debts have been paid. Long-term liabilities are lower than the national average, at 41 percent of total assets, or $2,527 per capita. Total unfunded pension liabilities that are guaranteed to be paid are $46.98 billion, or 33 percent of state personal income. OPEB are $0.01 billion, or less than 1 percent of state personal income.Share this

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 42nd.)
  • 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 44th.)
  • 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 28th.)
  • 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 10th.)
  • Trust fund solvency measures how much debt a state has. How large are unfunded pension liabilities and OPEB liabilities compared to the state personal income? (Kansas ranks 2nd.)

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

To read all our work on Kansas, go to mercatus.org/states/kansas.