The verdict is in on which are the best run states

The Mercatus Center at George Mason University has issued its annual rankings of the best run state governments and to no one's surprise, almost all the top ranked states are Republican-run, while almost all the lowest ranked states are Democratic.

What makes this list so intriguing is that the factors that make the Republican states work well aren't much of a secret and could easily be adopted by blue states.


The rankings in the fourth-annual "Ranking of the States by Fiscal Condition" report, which was released this morning, are based on a review of audited financial statements for 2015 covering five measures that gauge the states' ability to pay bills, avoid budget deficits, and meet long-term spending needs and cover pension liabilities.

Cash solvency, for example, measures a state's ability to pay immediate bills. Budget solvency focuses on whether states will end the year with a surplus or deficit. Service-level solvency gauges a state's ability to meet a demand for increased spending. Long-run solvency looks at a state's ability to meet longer-term spending commitments. Trust-fund solvency looks at the states' unfunded pension liabilities and state debt.

There were several changes in the rankings from last year. Florida moved from sixth place to first, while Alaska dropped from first place last year to 17th this year, driven mainly by the fall in oil prices. Idaho moved into the top 10.

At the bottom of the heap, Louisiana and West Virginia both dropped down in the 10-worst list, while Hawaii greatly improved, going from 45th place last year 27th this year. Connecticut, Maine and New York also climbed out of the bottom 10 list. But New Jersey fell to dead last from last year's 48th place.

The report also includes rankings for each individual measure of fiscal solvency, in addition to the overall ranking. Some states do well on some measures, and bad on others. New Jersey, for example, is last on long-run solvency and second to last on budget solvency, but ranks 24 on service-level solvency.

Nearly bankrupt Illinois is in the bottom in all but one of the five individual measures — service-level solvency.

The Mercatus report doesn't include data on the states' political leanings or tax burdens, but the implication is clear.

Of the 25 most-solvent states, all but four are solidly Republican. Of the bottom 25 states, all but five are solidly Democratic.

Do red states have a greater care and concern for how taxpayer dollars are spent?  I think the figures published in the report tend to validate that hypothesis.

The report does not catalogue some important criteria like the power of public unions, quality of schools, or the state of infrastructure.  But looking at the fiscal health of states gives us a clue to the quality of life for residents.  Are red-state citizens happier than blue-state citizens?  

Blue state-defenders will point out that most of those top states are rural in character and thus don't have to deal with urban problems that require huge expenditures of tax dollars.  That's a false argument when you consider that this assumption rests on the blue-state model that requires a certain level of dependency on the part of poor, urban residents.  Needless to say, it's hard to keep a state's fiscal house in order when so much cash disappears down a rabbit hole.

The superiority of the red-state model doesn't matter.  Blue-state politicians must satisfy constituencies that have come to depend on them over the years.  What happened in Illinois is instructive.  GOP governor Bruce Rauner attempted a wholesale makeover of the state's finances and ended up being stymied at every turn by teacher unions, public unions, social service groups, and other special interest groups who had been sucking on the government teat for decades.  Rauner failed and will likely lose re-election because of it.

So perhaps the solution to blue-state troubles is simple.  Enacting those solutions is what's difficult.

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