How does Alabama’s fiscal health stack up? You might be surprised

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July 7, 2015

MONTGOMERY, Ala. — Despite this year’s well-publicized budget problems, Alabama’s fiscal health is actually significantly better than most other states, according to research from George Mason University’s Mercatus Center.

The new report, released Tuesday, ranks Alabama at #13, only behind #5 Florida and #8 Tennessee in the South.

The study was conducted 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 pensions,” according to author Eileen Norcross.

Alabama ranked particularly high (#8) in fiscal solvency, but near the bottom (#36) in budget solvency— whether a state can cover its fiscal year spending out of current revenues. According to the study, the state currently runs at a 2 percent deficit.

The Yellowhammer State also scored well in ratio of debt to state personal income—2.9 percent, compared to 4.0 percent nationally.

The debt per Alabamian is a less-than-ideal $1,309, but is still significantly less than the per capita national average of $2,768.

Here are 10 states with the best fiscal health:

1. Alaska
2. North Dakota
3. South Dakota
4. Nebraska
5. Florida
6. Wyoming
7. Ohio
8. Tennessee
9. Oklahoma
10. Montana

And the 10 states in the worst shape:

50. Illinois
49. New Jersey
48. Massachusetts
47. Connecticut
46. New York
45. Kentucky
44. California
43. West Virginia
42. Maine
41. Pennsylvania

To read the complete study visit the Mercatus Center’s website.