Writer: ‘The more money the state takes from taxpayers, the worse it handles it.’
The Mercatus Center at George Mason University just came out with its fourth annual “Ranking of the States by Fiscal Condition,” and the report is an indictment of Democrats’ liberal tax-and-spend policies that make their voters and politicians look bad. The more money the state takes from taxpayers, the worse it handles it.
Mercatus used five criteria to judge how well a state can pay its bills, keep deficits out of the budget, cover state-run pension plans and meet long-term spending goals. The five criteria measure solvency in the areas of cash, budget, service-level spending, long run spending and trust fund and pension debt.
The most fiscally sound states tend to have the lowest tax burdens, according to a separate analysis by the Tax Foundation’s 2017 report, which measures state and local tax burdens as a percentage of state income.
In the top 25 states, 21 of them are run almost entirely by Republicans. Of the bottom 25, 20 of them are run by Democrats.
The states with the best financial outlook also tend to have the lowest taxes and vice versa.
Of the 15 least-solvent states, 10 are among the 15 states with the highest tax burdens.
Total primary government debt is $44.23 billion, or 8.3 percent of state personal income, far above the average for the U.S. Unfunded pension liabilities, on a guaranteed-to-be-paid basis, are $224 billion, or 42 percent of state personal income. OPEB is 15 percent of state personal income, the highest ratio in the states.
Based on its fiscal solvency in five separate categories, New Jersey is ranked 50th for its fiscal health. New Jersey is last on long-run solvency and second to last on budget solvency, but ranks 24 on service-level solvency.