July 11, 2017

#9 | Ranking the States by Fiscal Condition: Idaho

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Summary

On the basis of its fiscal solvency in five separate categories, Idaho ranks 9th among the US states for its fiscal health. Idaho’s fiscal performance is strong in both the short run and long run. On a short-run basis, Idaho has between 3.84 and 5.47 times the cash needed to cover short-term obligations. Revenues exceed expenses by 10 percent, and net position increased by $467 per capita in FY 2015. After meeting its debts, net assets are 36 percent of total assets. Idaho’s weakest ranking is for service-level solvency due to a higher-than-average level of revenues as a percent of state personal income. Long-term liabilities are 12 percent of total assets. Idaho carries a low level of debt at $1.33 billion, or 2.1 percent of state personal income. Unfunded pension obligations, on a guaranteed-to-be-paid basis, are $15.48 billion, or 25 percent of state personal income; this is lower than the average in the states of 35 percent. 

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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. (Idaho ranks 10th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Idaho ranks 6th.)
  • 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? (Idaho 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? (Idaho ranks 33rd.)
  • 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? (Idaho ranks 13th.)

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

To read all our work on Idaho, go to mercatus.org/states/idaho.