July 11, 2017

#32 | Ranking the States by Fiscal Condition: Kansas

Summary

On the basis of its fiscal solvency in five separate categories, Kansas is ranked 32nd among the US states for its fiscal health. On a short-run basis, Kansas has between 1.22 and 2.35 times the cash needed to cover short-term obligations. Revenues cover 98 percent of expenses, and net position decreased by $76 per capita in FY 2015. On a long-run basis, Kansas’s performance is stronger. It is also better than the average among states. There are no net assets remaining after debts have been paid. Long-term liabilities are 35 percent of total assets, less than the average in the states of 61 percent. Kansas carries a low level of total primary government debt at $3.7 billion, or 2.8 percent of personal income. On a guaranteed-to-be paid basis, unfunded pension liabilities are $38.68 billion, or 29 percent of state personal income.

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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. (Kansas ranks 31st.)
  • 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 45th.)
  • 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 21st.)
  • 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 14th.)
  • 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 20th.)

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.