FY 2011 Budget Shortfall. Virginia stands out with the third lowest percentage. (Click for more legible image.)
Yikes, there is yet another ranking of the 50 states, this one from 24/7 Wall Street, which provides “commentary for U.S. and global equity investors.” This report purports to measure the “best and worst run states in America.” Here is the philosophy animating the study:
The successful management of a state is difficult to measure. Factors that affect its finances and population may be the result of decisions made years ago. A state’s difficulties can be caused by poor governance or by external factors, such as extreme weather.
A state with abundant natural resources should have an easier time balancing its budget than one starved for resources. Regional problems or the national decline of certain industries can destroy local economies. The subprime mortgage crisis, for example, disproportionately affected states with strong construction and real estate markets. Such factors can be easily identified and noted as possible causes for a state’s poverty levels, unemployment, or strained coffers.
Despite this, it is the responsibility of each state to deal with the resources at its disposal. Each government must anticipate economic shifts and diversify its industries and attract new business. A state should be able to raise enough revenue to ensure the safety of its citizens and minimize hardship without spending more than it can prudently afford. Some states have historically done this much better than others.
24/7 combed through economic, census and fiscal data to generate its results. The findings? Here are the top 10 states: North Dakota (No. 1), Wyoming, Nebraska, Utah, Iowa, Alaska, South Dakota, Vermont, Virginia (No. 9) and Minnesota.
The worst: California (50), Rhode Island, Illinois, Arizona, New Jersey, Nevada, New Mexico, South Carolina, Florida and Louisiana.
Here’s what 24/7 Wall Street says about Virginia:
9. Virginia
Debt per capita: $3,131 (20th lowest)
Budget deficit: 8.5% (43rd largest)
Unemployment: 6.2% (8th lowest)
Median household income: $61,882 (7th highest)
Pct. below poverty line: 11.5% (tied-7th lowest)Economically, Virginia has been in very good shape compared to many other states in the region. The state’s poverty and unemployment rates are among the nation’s lowest, while median household income is one of the nation’s highest, at nearly $62,000. Given that the state is home to the Pentagon and large defense contractors, it could be hit with job cuts if the nation goes over the fiscal cliff. The automatic defense cuts set to take place if that happens mean Virginia could lose more than 207,000 jobs, an estimated 136,000 of which would be related to the Department of Defense. As of 2011, government spending accounted for 18.7% of Virginia’s GDP, the fourth-highest percentage in the nation.
Take it for what it’s worth.
— JAB
