October 12, 2018

Mercatus: CT nearly last in fiscal health

Connecticut is financially in disarray, ranking nearly last in the nation in fiscal health, according to a new report.

The free-market-leaning Mercatus Center at George Mason University says Connecticut's financial condition ranks No. 49 in the nation, as state revenues cover just 92 percent of expenses, which is below the U.S. average.

Connecticut's long-term liabilities are also higher compared to national averages, at 230 percent of total assets, or $17,418 per capita. Meanwhile, guaranteed, unfunded pension liabilities stand at $121.6 billion, or 48 percent of state personal income.

Drawing from fiscal year 2016, the report scores states based on cash flow, current expenses and revenues, long-term spending outlook, and how tax rates, revenues and spending compare to state personal income. It also measures state debt.

Under the rankings, Connecticut ranked last in cash solvency, No. 48 in budget solvency, No. 47 in long-run solvency and No. 27 in service-level solvency.

Connecticut has consistently performed poorly in the annual report, Mercatus authors wrote.

"They have experienced ongoing structural deficits, a growing reliance on debt to fund spending, underfunded pensions and other post-employment benefit liabilities, or some combination of these problems," the report said.

Excluding New Hampshire (No. 12), New England states received poor financial scores. Ahead of Connecticut are Massachusetts (No. 47), Rhode Island (No. 40), Vermont, (No. 39) and Maine (No. 34).

The top five states in fiscal solvency were Nebraska, South Dakota, Tennessee, Florida and Oklahoma and the remaining bottom five include Illinois (No. 50), New Jersey (No. 48) and Kentucky (No. 46).

View the report here.

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