The overall ranking integrates measures for five broad categories based on fiscal 2016 data. These include (listed in the order of Virginia’s performance):
Service-level solvency. Virginia scores 4th best in the nation for this set of measures indicating how much “fiscal slack,” or leeway, a state has to raise taxes or increase spending. States with low levels of taxes, revenues, and expenses as a percentage of personal income are ranked the highest.
Trust fund solvency. Virginia also scores well for this category, 11th, which reflects exposure to pension risks and other post-retirement benefits.
Long-run solvency. Virginia scores 16th for long-run solvency, a set of measures capturing a state’s ability to meet its long-term liabilities.
Cash solvency. Virginia ranks 27th by this set of measures indicating a state’s ability to meet short-term liabilities.
Budget solvency. Virginia ranks 31st for this composite of two measures indicating whether a state’s revenues match its expenses.
Virginia’s ranking slipped from 15th place the previous year — not a good sign.
But if it’s any consolation, CNBC has just rates Virginia as the 7th best state to do business.