Federalism may be out of fashion (at least when it comes to state’s rights), but the effect of individual state policies on the lives of individual citizens remains as relevant as ever.
Consider, for example, the case of Puerto Rico (which is technically a territory, but has many of the functions of a U.S. state). Financial mismanagement by the territorial government has led to a humanitarian crisis. Those who can afford to leave — such as doctors and scientists — are fleeing the island for the U.S. mainland. Not surprisingly, Puerto Rico ranks dead last on the Mercatus Center’s ranking of states by fiscal condition.
The new study ranks each U.S. state’s financial health based on short- and long-term debt and other key fiscal obligations, such as unfunded pensions and healthcare benefits. “Growing long-term obligations for pensions and healthcare benefits continue to strain the finances of state governments,” notes the report, “highlighting the fact that state policymakers must be vigilant to consider both the short-term and the long-term consequences of their decisions.”
The top five states on this year’s list are Alaska, Nebraska, Wyoming, North Dakota, and South Dakota. The bottom five are Kentucky, Illinois, New Jersey, Massachusetts, and Connecticut.
Check the report to see where your state ranks.