REPORT ANALYSIS: Most Solvent States Are Run by Republicans

(SM Chavey, Liberty Headlines) According to data from a recent study, Republican-led states tend not only to have lighter tax burdens, but they’re fiscally healthier as well.

Rick Scott Florida photo

Florida Gov. Rick Scott Photo by Gage Skidmore (CC)

The study came from the Mercatus Center, a research center at George Mason University that is “dedicated to bridging the gap between academic research and public policy problems,” according to its website.

The Mercatus report did not discuss the political standing of each state, but an Investor’s Business Daily article did. And it found that of the 10 states that were ranked highest in solvency, only the 10th has a Democratic governor.

Using the states’ own audited financial reports, the study looked at five aspects: cash solvency, budget solvency, long-run solvency, service-level solvency, and trust fund solvency.

  • Cash solvency looked at short term cash on hand.
  • Budget solvency questioned if there was a budget shortfall in the fiscal year.
  • Long-run solvency judged whether or not the state could meet long-term spending commitments.
  • Service-level solvency asked how much “fiscal slack” a state had in case citizens demanded more services.
  • Finally, trust fund solvency looked into each state’s unfunded pension and healthcare liabilities.

The results were then averaged, so the top states had to have decent scores in all five categories.

Of the top 25 states, all but four are primarily Republican-led. Twenty of the bottom 25 states are solidly Democratic.

Florida, North Dakota, South Dakota, Utah, and Wyoming topped the overall list. According to the report, they consistently had little debt, lots of cash, and low short-term debt obligations.

Even these states, however, struggled with pension and health care. Some rely on unpredictable revenue sources — oil and gas. Declining oil prices knocked Alaska out of the top five and bumped Wyoming from third last year to fifth this year.

In last place was New Jersey, followed by Illinois, Massachusetts, Kentucky, and Maryland. Each of these states had high debts, not much cash, and large liabilities.

The bottom five states struggled with pensions and healthcare benefits even more. According to the report, “each holds tens, if not hundreds, of billions of dollars in unfunded liabilities — constituting a significant risk to taxpayers in both the short and long term.”

This is the fourth year of the report. While most of the states remained within five spots of where they were last year, six states (Alaska, Colorado, Louisiana, New Mexico, Pennsylvania, and Texas) saw substantial drops in fiscal performance and seven (Arkansas, Connecticut, Delaware, Hawaii, Maine, North Carolina, and Oregon) saw significant improvement.

It doesn’t look like states can tax their way to fiscal solvency, either. According to data from the Tax Foundation’s 2017 report, the 10 most fiscally sound states have only an 8.5 percent average tax burden, while the lowest 10 states averaged almost two percent higher, 10.2 percent.

Four of the nine states that raised taxes this year are in the bottom 10. None are in the top.

“The bottom line is that the more money the state government takes from taxpayers, the worse it handles it,” the Investor’s article said.

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  • Naval Lint

    Absolutely no surprises here….

  • Pat Robertson

    Republican run states also better places overall to live in

  • Mike W

    34% of all the people in the United Staes that receive food stamps live in California. 2nd to New York. California is over 1/2 a trillion dollars in debt – that was before the passed the new state run health care plan – which they have absolutely no idea how they will pay for – but – they estimate it will cost $400,000,000,000 – that would put them over the trillion dollar debt threshold. Remember that is just an estimate – and an estimate from people who were already 1/2 a trillion in the hole – so I wouldn’t think that estimating or budgeting are one of their strong points. But we have 2 states that have a total of over 70% of all food stamp recipients in the country. These are two of the states that think they should be telling everyone else how things should be done?

  • Dave

    I thought that was common knowledge! It took Mitt Romney as governor or Massachusetts to balance their books, and they still went democratic afterwards. It’s the same in most major U.S. cities and states. Look at Illinois of all places! Obama’s playground!

  • Knowledge Transfer

    Maybe someone can help me here! I thought that the states were unable to run up debts because they are required to balance budgets?

    • Eileen Carman

      Every state will have some debts. Those who work for the state government who are in defined benefit plans are one of the taxpayer liabilities that are factored into these reports.

      • Knowledge Transfer

        Thank you Eileen.

    • Lmcyber

      That is correct. They have to have a balanced budget.

      • Knowledge Transfer

        And yet so many – especially as expected the Communist States of America – are in deep debt. How is that possible and permissible?

  • rev_dave

    Connecticut improved? By their own pronouncements, they are nearly bankrupt. If it were a corporation, it would already be shuttered. And just how bad off do you have to be for bankruptcy to be a ‘significant improvement’?

  • RockinOn

    If we have to manage our finances to stay above water, I reckon the states should be required to do the same! That would alleviate a lot of problems with our national debt if the Congress was made to maintain financial stability as well!

    • gardeauxandrew

      There will soon be no more democrats voted in office and the republicans better act fast on their promises or it will be the same for them! We the People are feed up and will have to think outside the box and not vote for any of the current established corrupt 2 party political system! We the People will also get out of the current false mindsets that any other party is a wasted vote, also the false mindset that any government is too big to fight or fail, and also having a blind patriotism to the current long, long, corrupt political system brought on by long. long corrupt politicians! Stop government wasteful spending and put it to better use in American people! Take away politicians perks and let them work and get paid the same as the common American with term limits!

      • RockinOn

        Amen Bubba, I just sent a letter to my Representative, Senators stating the same thing you are expressing and it is time Amigo!

    • Lmcyber

      RockinOn – I think you need to study up on states and the fed. government. States have to balance their budget every year, but the fed. gov. does not. It would be impossible to with the fed. govt.

      Because states are required to balance their budgets every year and many states are barely making it, it is really quite dumb to dump a bunch more liability onto the states as this current administration is trying to do. The health care bill would ultimately devastate most states. They have no business dumping much of the fed. gov’ts responsibility onto states, knowing full well that they have to balance every year. They can’t possibly make the expectations that are getting dumped on them, which is why many governors do not agree with this new health care bill. It would devastate their budget and their people.

      • RockinOn

        Apologies, that was supposed to be UNITED states above, thanks

        • Lmcyber

          Not a problem!

      • Coastie407

        Lmcyber, why is healthcare the responsibility of the government to start?

        Is the state now responsible for all the needs of the people?

        What’s next, guaranteed food and housings?

        • Lmcyber

          It is the responsibility of every government who happens to care and acknowledge a commitment to their citizens and to their economy to stabilize and make sure that everyone does have access to affordable care. If a country deserts their responsibility and ends up with over a third of a population that does not have access to care, where the rural hospitals across the country are closed, where most who are in rural areas and might I remind you, Red states, in which the country has already been devastated by a recession caused by ideological policies of an extreme party have no insurance AND NO access to an ER to get even emergency care, where those who have pre existings, and those in the 50-64 age group do not have access to AFFORDABLE care, ….. then that country has a huge problem with their population and their economy which will fail under those circumstances.

          You, my dear, obviously have no knowledge of what people have to pay for insurance and what they will be getting for a cheap policy. It is wrong for people in this country who make a good living and still cannot afford a health care policy. This repube bill does not address the costs and cost increases with medical care. Your party does not care. They just want a win.

          I pay over $2800 a month for a policy for two. That is what it costs for an individual policy. Is that fair, in the wealthiest country in the world? Do you think many people can afford that policy? Oh, trust me, we work, and have since I was 17, and we were not given an education by anyone. We had to pay for it ourselves.

          The shame of it is, is that we will be the only developed country in the world with the worst medical outcomes, with the worst mortality rate and the highest cost per person. This repube bill does not address that which is the core of this country’s health care problems – costs. All they are doing is taking away from peoples care. They are cheapening care, and are again making it a privilege for the wealthy only. That is what this bill by Reps. does.

          Before you write next time, why don’t you research the subject matter and educate yourself. You have no knowledge on the subject, and ignorance is not a substitute in this day and age.

          • Coastie407

            Lmcyber,

            Actually, it is you sir or madam that manifests ignorance in your response, as you do not know me, the extent of my education, nor my personal ability to pay for health insurance. You even go as far as to assume
            my political party affiliation or for that matter my nationality.

            Yet you base your lengthy but erroneous response based on a
            series of unknown premises, and as such arrived, out of breath, to an equally erroneous conclusion.

            However, you are in fact very good at touting progressive talking points, full of pseudo-Keynesian attributions to what the state should or should not do for its people and its economy.

            Based on the thin gruel you presented as your argument Lmcyber, may I suggest that you start with reading a bit of history, and realise that the net results of Keynesian economic has not been kind to either the United Kingdom or the United States. Quite the contrary, it has led both of the these nations and numerous others into a twin spiral of growing government and resulting ever-higher rates of taxation that can never quite cover the growing expenses of a less and less effective government, combined with ever-shrinking rate of compensation of the labouring classes. A recipe that always results in an impoverished nation; a small well-to-do class of elites ruling over the masses barely surviving but “entertained” (distracted really) by constant scandal, war, and rumours of war.

            Try reading a bit more economics from your own Milton Freedman
            and learn the power of true, unfettered, free-market capitalism. Learn about the example in Chile, led by the Chicago Boys.”
            Do not be fooled by the false allure of low-cost medical services and liberal access to healthcare providers sold to the American electorate by your prior president. This was a charisma, a deliberate action by the prior Administration in the political strategy espoused by American sociologists and political activists Richard Cloward and Frances Fox Piven to destroy the best healthcare system ever devised by mankind, and replace the
            same with an inferior, state-run system that offers far less healthcare, bur
            far more state control.

            This will result in not only an inferior healthcare system akin to Britain’s failing National Health Service (NHS) but more importantly will become a de facto socialist takeover of the American people; in effect a political revolution without firing a shot!

            Lastly, you may want to read John Locke’s Two Treatises of Government and Jean-Jacques Rousseau’s The Social Contract, or Of the Social Contract, or Principles of Political Law. The Framers of both the U.S. Declaration of Independence and the U.S. Constitution were very familiar with both these books; so should every thinking American.

            If you consider yourself a thinking person… start by cutting out the ad hominem attacks, do a little reading, then ring me up again and we
            can have a conversation.

          • Lmcyber

            Damn, everytime you open your mouth, you only confirm my thoughts about you. It is obvious that you are a die hard conservative. You drip tea party and look what website you are on. LOL

            I think you need to understand that even a fifth of your population is either sick or dying, well, it doesn’t take a brain child to figure out that it would have deleterious effects on the economy. Anybody can figure that out. Secondly, you obviously did nothing I asked you to do and go study up on all the healthcare systems across the world that are in developed nations. Every developed country has some sort of universal care either private or public – fact. We come in last place on cost, ours is $9000+ per person, and all others averages just over $3000. We also come in last when it comes to medical outcomes and mortality. You know who comes in first?? Britain. So, your statement on Britain’s system failing is just plain false. Look it up bro!

            So, you don’t know what you are talking about. If you want to put in a quality health care system that costs the least, you go to a universal or single payer system. That is a fact! Our healthcare system is now inferior to every other developed country in the world. Fact.

            In response to your ideological rantings, you need to come down to reality. Most debt and deficits were ran up by Rep. administrations. Yes, Obama had his issues which was mostly caused by the stimulus which was basically saving this country from a republican caused recession. You can’t run two wars on a credit card, give massive tax breaks to the wealthy, and change the accounting system so it doesn’t show on the deficit and have a healthy economy. Again, facts.

            You see, I deal in reality. I’ve ran businesses my whole life and know what works, especially for small business. Reality – businesses always did much better with Dem. in charge vs Reps. I have that same thing over and over again. I also deal with 2017, not the 1800’s. Let’s be realistic. Your rantings and ravings don’t apply anymore.

            The difference between you and me is I deal with reality. You deal on ideology, and I wish you good luck with that because it isn’t reality!

          • Coastie407

            Well, perhaps we do share something, as I’ve run both several small companies and a major aerospace company, but cannot concur that we did better under conservatives than liberals/labour. Then again, my team and I ran our companies and not the members of Congress.
            Secondly, it is easy to “read” that the NHS is doing well, far harder to experience in the flesh.
            Lastly, you continue to miss the overarching point. Anything given over to the government to mange and run, vice the narrow construct of the basic functionalities inherent to the state, i.e., national defence, will without fail cost more and deliver less. Yet, progressives like you are in the end statics, each of you hell-bent to move further and further under the “protective wing” the all knowing state.
            Dame Margaret Thatcher said it best: “socialism works until you run out of other peoples money.” Courtesy of Keynesian economics, the United States ran out of money during the Johnson Administration, but still continues to spend money as if they print it… and remind me, was Mr. Johnson not a Democrat?
            Wilson, Roosevelt, Johnson, Obama… all stalwarts of the progressive cause, each of them responsible of placing the United States deeper in debt, and yes, all Democrats.
            Sir or Madam, that is not “Tea Party” rhetoric but a statement of the cold, hard facts.

          • Lmcyber

            Do me a favor and look very hard at Medicare and in all actuality has run very well and has been the most efficient system in dispensing, far more efficient than private insurance. I also want to point out that you do not necessarily have to have a health care system that is a universal care system, publicly run.

            It can be done privately in full transparency. Whatever way, as long as our end result is a healthy labor system, that is efficient and cost effective.

          • Lmcyber

            By the way, you should also throw the Bushes and Reagan in that mix. They were actually more culpable than Obama was. At least, Obama was getting us out of a horrible recession while Bush 2 walked in with a surplus. If I’m not mistaken those guys were big spending Republicans.

          • Coastie407

            Now I know you are little more than an ideological troll, and clueless on how American government works.

            The power of the purse resides with the Congress not the Executive. The President can only spend what the Congress gives him or her, and all bills of revenue emanate from the Lower House as per the Constitution.

            Note that in both the Regan and GHW Bush Administration the House was held by liberals/Democrat Party. However, during the Clinton Administration it was held by the conservative/Republican Party.

            And gee, what a surprise, they balanced the budget! This was Gingrich’s doing than Clinton, but as POTUS, he takes the victory lap.

            Conversely, during the GW Bush Administration, the House was in Republican hands until 2006, when Nancy Pelosi takes over as Speaker of the House and they proceed to dismantle much of the apparatus that safeguarded the home mortgages. Now everybody can qualify for a loan, even those that in reality could not.

            What possibly could go wrong?

            We got to learn that during the summer of 2008, when Sen. Chuck Schumer literally talked IndyMac Bank into insolvency by creating a run on the bank.

            I was a stockbroker then, and seeing the handwriting on the wall, I encouraged every one of my clients to go into cash. Those that listened (about half) still had all their investments by years’ end. Those that wanted to squeeze out that extra one percent bled out in September.

            Your “Dear Leader” Obama–like his hero FDR–only served to perpetuate the damage caused by his cronies on Capitol Hill and kept the U.S. in a constant economic crisis mode, or as Raum Emmanuel once said, “never let a crisis go to waste,” in particular one of their own creation.

            The current failure of the U.S. healthcare system is also purposeful, as to force the citizenry into a socialist-inspired, single-payer (i.e., government-run) national healthcare system. In short, healthcare run like the Postal Service or your local DMV.

            The rich and the elites will have their private clinics, whilst the masses will que up for whatever their masters in Washington see fit to give them, so long as they are “productive.” Once you’re too old and too feeble to work, forget the knee replacements and heart surgeries.

            Now its palliative care and end-of-life counseling for you.

            No sir, you have very little to teach me, in either history or economics. If you are so enamored with European Socialism, perhaps you should move to Sweden…which currently leads the world in the tax burden on the shoulders of their citizenry…

            …and interestingly enough, in suicides.

          • Lmcyber

            Again, your lack of real world experience is very limited obviously. You are not prepared to really discuss this subject, especially when you go off on your ideological diatribes.

            In reality, this new health care bill will take health care away from everybody. They are making health care a privilege for a few. Sorry, we are not the great health care system we once were, and this will only make it worse, and you know it. Listen to the experts, because you are ignorant on the subject. Again, look at Medicare, the best run program in dispensing medical care in this country. Who runs it bud? The government. To put it into simpler terms for you to understand – we need to move to Medicare for all, a program run by the government, that has the best medical outcomes, with the most efficiency and in the most cost effective way.

            By the way, you really need to examine your modern American political history a little closer. Your statements on Reagan and Bush are completely false, and you know it. Bush the second made enormous mistakes with this country and as a result we ended up with the greatest recession since the great depression. Reagan didn’t care about the future. Look at his numbers bro. He borrowed on the credit card. Whether you like it or not, the past Republican presidents, in your world, were big spending conservatives. A little bit of a dichotomy, but most conservatives will agree with me on that point. You on the other hand, haven’t done the work to understand that point.

            Please don’t comment on the health care subject anymore if you are not willing to fully educate yourself on the subject. This new bill is incredibly stupid by the republicans and will devastate health care in this country. This bill was written to honor their commitment of repealing Obamacare, nothing more as it does not represent good public policy. While the rest of the country will be denied care, the Repubes in Congress are still going to stay with the Obamacare rules. How hypocritical. And by the way that is in their legislative language.

          • Lmcyber

            Do me a favor – start reading up on UHC, (universal health care), and see how many countries have it, how well it actually functions (in every area, it beats our system), and then come back and let me know. This isn’t coming from NIH. It comes from many international organizations, some listed below. If you are truly a business man, then you will understand why this current system will not work and why we truly do need to move toward a UHC system. There is a ton of information out there. The statistics I gave you are pretty well understood across most sources. So, do me a favor and give it a look!

            http://www.who.int/mediacentre/factsheets/fs395/en/
            or
            Money Watch
            “It’s been well documented that our current health care system is far more expensive and has far worse outcomes than that of many other developed nations. This certainly isn’t exactly a good example of “American exceptionalism.” In fact, it’s one aspect of life here in the United States that could use some changing.”
            or
            https://truecostblog.com/2009/08/09/countries-with-universal-healthcare-by-date/
            or
            Oxfam
            https://www.oxfam.org/sites/www.oxfam.org/files/bp176-universal-health-coverage-091013-en_.pdf

          • Coastie407

            …and redo half my Masters?

            No thanks, I’m knee-deep into my Ph.D. to read again what I studied for several years.

          • Lmcyber

            Which tells me how little you are truly informed. Don’t comment if you are not willing to educate yourself, which you are not willing and your overall ignorance shows through. It is incredible how narrow minded PhD’s can be. They may know their miniscule portion and truly, they can’t see the forest from the trees, and you sir are a good example of blind stupidity. Your ideological narrowness does not prepare you to deal with matters that fall outside your little realm, and you truly have no clue what you are talking about when it comes to health care in this country. For you to understand life, you need to move from the books to reality and you haven’t made that transition.

            Don’t comment on health care next time until you are willing to educate yourself.

  • Eileen Carman

    Amazing! California, having been run by Dems for all these years is not at the bottom with Illinois!

  • I live in Idaho and it is Republican run which also has a balanced budget in the state constitution.

  • Maxine Albritton

    no shock here. Look what the last democrat president did for americas debt. He let it soar. I wonder how anone can even think of him being the best president we ever had. more like the worse.

  • mcgyver35

    Only reason North Carolina is doing well is because we had a republican governor, but, the stupid people of North Carolina just elected a Democrat governor. They didn’t like the republican governor because he took a stand against Ovomits perverted bathroom laws. Guess North Carolinians don’t care if some perverted man watches their little girls in the bathroom.

    • Mimi

      Look at California and it’s economy. 6th largest economy in the world… all by itself. Duh!? Open your eyes and mind instead of your big gluttnous mouth.

  • Eguth3

    Should add cities as well. Ever wonder why so many large urban cities where the mayor and city council are liberal democrats end up going bankrupt and generally are filled with enormous corruption and scandal riddled too. They also have high dropout rates in schools because liberal policies don’t work. They generally over spend and demand higher taxes. It’s always a scam to create higher taxes and those funds generally get misused so they demand more tax hikes. It’s a vicious circle and brings chaos.I would love to see Chicago and Detroit get audited, you’ll see what they did with the money.

  • Lew Wetzel

    If the $150 billion-plus in annual health care fraud were instead diveyed between the states, almost all states would be solvant.

  • InternetCensorsREvil

    And all of the worst states operate tax and spend social programs, adding to the addage that sooner or later you run out of other people’s money to spend

  • Roy Thomas

    Not a surprise to me at all. The leftist liberal welfare states are run by democraps who promise the “victims” everything in exchange for votes but these are the very low class ghetto trash who keep believing it – promises are easier than exercising self responsibility. And their status in life never improves but no matter, taxing the rich will solve everything, won’t it? The top 25% earners already pay 90% of the taxes in our socialistic society.

  • Frank Budz

    All you have to do is look at everything the Democrats touch. It is always in the red, take for example low income housing. By the time a new development is paid for, it needs upgraded. It is a never ending money grab. That is why we are in the shape we are, bloated fat dumb and happy, why change things. This is the Democrats way of thinking and the reason states run by Democrats are always in the red. Most of these states have been run by Democrats for decades and their response to budget shortfalls is to raise taxes. I say live within the budget that was passed, if you can’t, cut services. We as workers cannot demand more money from our employers because we mismanaged our finances, so to should the governments be held to the same standards. This is not just a Democratic problem, all politicians should heed the voice of a Country that is tired of all the BS.

  • RockinOn

    I am Texan born here raised here, and there are many Good Mexicans, that fought and died here at the Alamo and elsewhere fightin for the independence from Mexico, and if you’re gonna get your “panties in a wad” over someone using Amigo, you need to realize that this state and country, even you are a descendant of some other nationality ! The only ones here that are true native Americans are the American Indians, who were done mighty wrong by the imported Americans! Big Time ! So Lighten Up, it is better to be referred to as a “Friend”, than many other words in espanol, and I know several of those which are derogatory, get over the headache and realize, we are all in this fight for America together ! Granted, many need to go, but not all are bad in any nationality !