July 11, 2017

#4 | Ranking the States by Fiscal Condition: Utah

Summary

On the basis of its fiscal solvency in five separate categories, Utah is ranked 4th among the US states for its fiscal health. On a short-run basis, Utah has between 4.05 and 10.07 times the cash needed to cover short-term obligations. Revenues exceed expenses by 13 percent, and net position improved by $481 per capita in FY 2015. On a long-run basis, net assets are 26 percent of total assets after debts have been paid. Long-term liabilities are 23 percent of total assets, or $2,336 per capita. Total primary government debt is $5.93 billion, or 5.1 percent of state personal income. Utah’s lowest ranking is for trust fund solvency. Unfunded pension liabilities, on a guaranteed-to-be-paid-basis, are $35.66 billion, or 30 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. (Utah ranks 3rd.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Utah ranks 4th.)
  • 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? (Utah ranks 14th.)
  • 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? (Utah ranks 12th.)
  • 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? (Utah ranks 23rd.)

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

To read all our work on Utah, go to mercatus.org/states/utah.