July 11, 2017

#13 | Ranking the States by Fiscal Condition: Ohio

Summary

On the basis of its fiscal solvency in five separate categories, Ohio is ranked 13th among the US states for its fiscal health. On a short-run basis, Ohio has between 4.03 and 5.42 times the cash needed to cover short-term obligations. Revenues exceed expenses by 1 percent, and net position improved by $87 per capita in FY 2015. On a long-run basis, net assets are 7 percent of total assets. Long-term liabilities are 55 percent of total assets, or $3,620 per capita. Total primary government debt is $17.71 billion, or 3.5 percent of state personal income. Trust fund solvency is among the lowest in the United States. Unfunded pension obligations, on a guaranteed-to-be-paid basis, are $312.10 billion, or 62 percent of state personal income, and OPEB is 3 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. (Ohio ranks 8th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Ohio ranks 40th.)
  • 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? (Ohio ranks 33rd.)
  • 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? (Ohio ranks 25th.)
  • 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? (Ohio ranks 48th.)

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

To read all our work on Ohio, go to mercatus.org/states/ohio.