6-3-16 – Mercatus Center Ranks States’ Fiscal Health, VT In Bottom Third

by Rob Roper

The Mercatus Center of George Mason University released its annual evaluation, Ranking States by Fiscal Condition. Says the report:

The financial health of each state can be analyzed through the states’ own audited financial reports. By looking at states’ basic financial statistics on revenues, expenditures, cash, assets, lia­bilities, and debt, states may be ranked according to how easily they will be able to cover short-term and long-term bills, including pension obligations.

Vermont ranked 36th overall — the bottom third — based on our cash solvency (30th), budget solvency (27th), long-run solvency (34th) , service level solvency (47th), and trust fund solvency (6th). The Vermont Summary page concludes,

On a cash basis, Vermont has between 1.28 and 2.23 times the cash needed to cover short-term liabilities. Revenues exceed expenses by 3 percent, for a surplus of $269 per capita. On a long-run basis, Vermont has a negative net asset ratio of −0.03, and total liabilities are 38 percent of total assets. Total debt is $595 million. Unfunded pension liabilities are $4.48 billion on a guaranteed-to-be-paid basis, and other postemployment benefits (OPEB) are $1.84 billion. These three liabilities are equal to 23 percent of total state personal income.

That really bad 47 for “service-level solvency” is a reflection of “how high taxes, revenues, and spending are when compared to state personal income.” In other words, is there any tax capacity left in case of an emergency, and in Vermont the answer is no.

For those wondering, the fiscally healthiest states are Alaska, Nebraska, Wyoming, and the Dakotas. The five least fiscally healthy states are Connecticut, Massachusetts, New Jersey, Illinois and Kentucky.

– Rob Roper is president of the Ethan Allen Institute

{ 4 comments… read them below or add one }

Paul Hudson June 3, 2016 at 10:27 pm

Hi Rob,
Sorry that my home state has to face the awful truth, but the “tax & spend” philosophy dies when the middle class runs out of money.That has happened. Now Vermonters have to stop being dreamers when they vote for governor in November. I know how I’d vote, but I left VT and am a Florida resident.
Paul F. Hudson

Reply

William Hays June 4, 2016 at 12:31 am

Cool! The Progressive aim is to be 50th. They can do it.

Reply

H. Brooke Paige June 4, 2016 at 5:10 am

Yup, We’re Screwed !

from Rob’s article:

Total debt is $595 million + Unfunded pension liabilities are $4.48 billion on a guaranteed-to-be-paid basis, and other postemployment benefits (OPEB) are $1.84 billion. EQUALS about $6.5 billion or $10,000 for every man woman and child in Vermont ! (This seems impossible, lets double check – $6,500,000,000 divided by 626,000 Vermonters = Yup, we’re screwed !)

Any wonder Vermonters are fleeing the state, Hell just move over the state line to NH and your family of four exchanges a $40,000 liability for one of about $12,000 ! (NH unfunded liabilities are $4 billion with a population of 1,330,000)

H. Brooke Paige
Democratic Candidate for Governor and Attorney General

Reply

Jim Bulmer June 5, 2016 at 12:33 pm

Here we go again!!! If the measurement is bad, good ole Vermont is front and center. If it’s good, Vermont is no where to be found. If we do not defeat the super majority and elect Bruce Lisman in November, all will remain the same and Vermonters will suffer. If there is not a fundamental change in the way Vermont is run, in not too many years, there will be no middle class to tax. If this sad state of affairs is not a WAKE UP call, there never will ever be one!!!!

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