Wednesday, November 13, 2019

The Best Run States

Wall Street 24/7 concluded its most recent study on which states are the best and worst run, from a fiscal perspective.

You can view the entire list here. I will highlight Texas and California, because those two states get compared quite frequently, as well as having amusing stories appear, such as California Governor Newsom Gavin's claim that most of California's homeless came from Texas.

As you'll see, there isn't that much difference between the two largest states (in population): Texas at 29.2 million and California at 39.8 million.

9. Texas
> 2018 unemployment: 3.9% (25th highest)
> Pension funded ratio: 76.1% (22nd highest)
> 1 yr. GDP growth: 4.0% (5th highest)
> Poverty rate: 14.9% (11th highest)
> Moody’s credit rating and outlook: Aaa/Stable
Texas has one of the fastest growing economies in the United States. In the last year, the GDP of Texas expanded by 4.0%, well above the comparable 2.9% national growth. Texas also has the equivalent of 19.7% of its annual budget saved in a rainy day fund, more than all but two other states. Fiscally well managed, Texas is one of only 15 states with a perfect triple A rating and a stable outlook from Moody’s.
Compared to other states, those that are fiscally well managed and otherwise, the Lone Star State does not saddle its residents with a heavy tax burden. The state government collects the equivalent of $1,893 per resident annually in taxes, the third smallest tax revenue per capita among states and well below the $2,900 national average.
14. California
> 2018 unemployment: 4.2% (14th highest)
> Pension funded ratio: 68.9% (24th lowest)
> 1 yr. GDP growth: 4.3% (2nd highest)
> Poverty rate: 12.8% (25th highest)
> Moody’s credit rating and outlook: Aa2/Stable
California has the equivalent of 17.5% of its annual expenditures saved in a rainy day fund, a larger share than all but three other states and more than double the 8.3% average across all states. California also has one of the fastest growing economies in the United States. Between 2017 and 2018, California’s GDP grew by 4.3%, the second largest economic expansion among states, trailing only Washington state. Over the same period, the U.S. economy grew by 2.9%.
Despite the rapid GDP growth, California’s 4.2% jobless rate is slightly higher than the 3.9% national average. Still, by some measures, California is able to aid more of its unemployed residents. Of the more than 741,000 unemployed state residents, 45.6% receive UI benefits, well above the 27.4% national average.

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