July 11, 2017

#21 | Ranking the State by Fiscal Condition: Oregon

Summary

On the basis of its fiscal solvency in five separate categories, Oregon is ranked 21st among the US states for its fiscal health. On a short-run basis, Oregon has between 2.71 and 3.59 times the cash needed to cover short-term obligations. Revenues exceed expenses by 8 percent. On a long-run basis, net assets are 13 percent of total assets. In FY 2015, Oregon’s net position declined by $9.14 per capita partly due to the reporting of unfunded pension obligations. Long-term liabilities are 39 percent of total assets, or $3,112 per capita. Total primary government debt is $11.29 billion, or 6.5 percent of state personal income. Oregon’s trust fund solvency is among the weakest in the country. Unfunded pension obligations, on a guaranteed-to-be-paid basis, are $97.6 billion, or 56 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. (Oregon ranks 17th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Oregon 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? (Oregon ranks 26th.)
  • 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? (Oregon ranks 38th.)
  • 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? (Oregon ranks 43rd.)

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

To read all our work on Oregon, go to mercatus.org/states/oregon.