The following is an excerpt from Ellie Ismailidou | June 4, 2016 | marketwatch.com |
All that glitters is not gold and what might look like a wealthy economy doesn’t necessarily make a fiscally solvent state.
A ranking of all U.S. states based on their finances showed this week that a few of the richest states in terms of gross domestic product per person are also among the least solvent.
The report released by George Mason University’s Mercatus Center rated all states on the basis of various fiscal measures, such as cash on hand, budget solvency, debt and other liabilities, as well as so-called service-level solvency, which measures how much “fiscal slack” a state has to increase spending if citizens demand more services.
The analysts used the most recent available data from states’ financial statements in fiscal year 2014, which rendered the results shown in the map below:
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