5 Charts That Explain Just How Screwed Your State Is

Tyler Durden's picture

We've spent a lot of time of late discussing the precarious financial positions of states like Illinois, Connecticut and New Jersey which each suffer from their own myriad of financial threats including massive budget deficits, monstrous unfunded pension liabilities, pending debt downgrades, etc.  In case you've missed those notes, here is a recap for your amusement:

Of course, while Illinois gets all the bad press for being the undisputed champion of the "worst state in the union" honor, there are many other "up and comers" (yes, we're looking at you California with your massive unfunded pension obligation) aggressively vying for the title.

In fact, the Mercatus Center at George Mason University (GMU) has recently compiled a fairly comprehensive study, based on a number of objective financial metrics, ranking the 50 U.S. states according to their overall fiscal condition.  Among other things, GMU analyzed the following metrics:

  • Cash solvency.  Does a state have enough cash on hand to cover its short-term bills?
  • Budget solvency. Can a state cover its fiscal year spending with current revenues, or does it have a budget shortfall?
  • Long-run solvency. Can a state meet its long-term spending commitments? Will there be enough money to cushion it from economic shocks or other long-term fiscal risks?
  • Service-level solvency. How much “fiscal slack” does a state have to increase spending if citizens demand more services?
  • Trust fund solvency. How large are each state’s unfunded pension and healthcare liabilities?

All of which resulted in the following ranking map. 

Ironically (which, in case it weren't brutally obvious, we mean in the most sarcastic way possible), the resulting map looks eerily similar to the 2016 electoral college map with the Democrat-leaning states on the bottom end of the "fiscal condition" ranking and Republican-leaning states making out a bit better, on a relative basis.


Maybe it's just coincidence...then again, maybe promising every entitlement under the sun to your residents without a clue as to how to finance those entitlements is a really bad idea over the long term...just a thought.

But it's not just the overall ranking where the conservative states seemed to fare better. 

In terms of "cash solvency" (ability to meet short-term funding requirements), 8 of the 10 worst states were all blue states.


Of course, the lack of near-term solvency plaguing America's liberal states isn't for a lack of trying to aggressively over tax their residents...


Meanwhile, on net unfunded pension obligations (with liabilities discounted at the risk-free rate), the mix between red and blue states was more equal on the bottom end of the spectrum even though California's massive $900 billion obligation is roughly 3x that of the next worst state of Illinois.  Even more staggering is the fact that the aggregate unfunded state pension liabilities total over $5 trillion...and that doesn't count local and federal pension obligations.


And the coup de grâce, when it comes to the ability of the states to meet their long-term spending obligations, literally 12 of the 13 worst states in the union are controlled by Democrats and voted Democrat in the 2016 presidential election...which is even more amazing when you realize that only 19 states voted Democrat in the 2016 election in aggregate.


Perhaps it's time to admit that liberal economic policies, which can be summarized as higher taxes and higher entitlement spending, may not be working all that well?

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Delving Eye's picture

So, I'm in CT (screwed), and my choices to upgrade are Utah, the Dakotas or Florida? Nah. But I'd be happy to move to Wyoming. 

HRH Feant2's picture

Too many liberals in Utah. Too many bugs and roaches in Florida.

I agree, Wyoming looks better with each passing day.

Budnacho's picture

I'm In Illinois!....We're #1!....We're #1...and don't let anyone tell you different!



Juggernaut x2's picture

I took the kids out for donuts today and our uber-lefty bitch of an IL state senator was in there- it was all I could do to stop from walking over and spitting in her cup of coffee

pine_marten's picture

Should have grabbed her pussy and told you were entitled to do so.

Froman's picture

As if, that bitch is a tranny.  You would have been grabbing the Oscar Meyer.

bunkers's picture

ZH should have a bail-me-out page.

Hal n back's picture

If IL goes BK, and vendor debt is discharged as well as a severe reduction in Pensions (which were negotiated under duress as union workers regularly went on strike) Il can get fiscally healthy in a hurry.

BTW-IL teachers were the highest base paid in the nation. And IL costs are nowhere near the cost of living in California aor in the NY city area.

Teachers and other union pensioneers still will cry if their  pensions are taxes in Illinois as they feel thats aninapprproate diminuation of their pensions

They said all th etime the students come first--these retirees have raped the system so bad that the schools ar ecurrently out of cash an dht eretired teachers do not care, and of course they used hte students as bargaining chips when they went on strike--I guess thats ok but do not be hypocritical about they care abut studesnts first and foremost-they care about themselves first and foremost.


if we see a severe market selloff-all the funds run out of assets in 2-4 years. And tax revenues decline badly. Accompanied by a depression. People will be S.O.L.


darkstar7646's picture

Yeah, only after tanks have to roll in the streets of both Chicago and Springfield for a month in the latter and God knows how long in the former...

fattail's picture

The pensions are the catalyst for the next down turn after Yellen pops Trumps stock market bubble.

Vilfredo Pareto's picture

That is likely what it takes to reform the system, the complete inability to engage in business as usual.  

drgizmo's picture

source of the worst and best president in all of history ... Lincon and Obammamaaaaah- 

any_mouse's picture

Illinois source of the two tied for worst President.

Lincoln begat Obama in a way.

espirit's picture

3 rd chart. Net Unfunded Pension Liability (millions).

Cali = $900,000 (million)

Wow, that's more then I can count...

$900 Billion? Hmmm...

political_proxy's picture

Wow, that's more then I can count...


Archibald Buttle's picture

anyone notice the last state on the underfunded chart? (drumroll)...the state of vermont, home to the socialist bernie sanders! i get it that its a small state with i would guess a small population so the numbers will be smaller. but still, the irony! another sign that we are indeed living in interesting times.

Vilfredo Pareto's picture

Except for Montpelier which is eerily similar to peeps that inhabit urban Washington and Oregon it is buttfuck redneckville Yankee style.  Dumb country bumpkins can't add and subtract is why they got themselves in trouble.

Déjà view's picture

'Loan' Star State just AVG...CAB bonds...2nd highest per capita state/local debt...81 local muni pension plans with issues...
Sheldon Adelson/Wall Street et al take great 'INTEREST' in Tejas...

Thank God almighty FED/oil are 'infinite' resources...

Who would have thought...certainly not electorate!

Vilfredo Pareto's picture

I am bummed at the higher than average taxes in Arkansas, but at least the slight majority of revenue is regressive.  Everybody needs skin in the game.

Déjà view's picture


Take it up with National Geographic...


Shed Boy's picture

Liberals in Utah?...Ahahaha

DoctorFix's picture

IIf you can handle the winters and don't mind the isolation it's great

HRClinton's picture

Wyoming? Way too cold in the winter, for normal people. 

ZeroLounger's picture

Lotta testosterone up there in Wyoming.

Bigly's picture

I am screwed right there with you.

But i have to have something to proactively move to, not escape from.

I suspect other states will follow in the next 2 years. Not all, but many. And the feds will make sure pain is applied to 'good states'. Because we all know our feds LOVE MORAL HAZARD!

So what if we moved and our new state was just as screwed even if they look better right now?

Waste of effort.

Flair1239's picture

The Dakotas are very underrated.  Very nice places to live.

cornflakesdisease's picture

It's fixing to melt down via super volcanos.  The Dakotas are nice.

Mustafa Kemal's picture

Wyoming is our favorate state -for summer vacation. Winter in the Bighorn Basin is a whole nother matter.

warpigs's picture

Colorado works for me.

Déjà view's picture

'Yellowstone'...brings 'em down in a jiffy...

booboo's picture

The jet stream moves west to east, Boise will have a front row seat to the greatest show on earth. Buy now or be forever priced out but pick up a foundry thermal suit, the aluminum suit can double as a whole body tinfoil suit to protect against Government mind reading and infrared short arm inspections.

Vilfredo Pareto's picture

The redoubt states are flying under the radar to most people.    The new country of Pacifica in 200 years.

Vilfredo Pareto's picture

The redoubt states are flying under the radar to most people.    The new country of Pacifica in 200 years.

EmeraldWI's picture

This is an income problem, not a debt problem. 

We Are The Priests's picture

When money is debt, then your income is debt.  So, it rather seems to be a debt problem.

Bigly's picture

It boils down to a stupidity problem

drgizmo's picture

Ole "Zim bob your way" did not think it mattered either ... billionaires starved to death...

EmeraldWI's picture

Add 50 million to payrolls and tax from the first dollar in a progressive way. SSI, Medicare, Medicaid and deficits priorities over defense. End Repos and Prime Brokers.

Francis Marx's picture

So the more democrat the state is, the more economic carnage occurs?

I really never looked at it that way.

NoDebt's picture

PA:  Medium screwed.  I have time left yet.


Miffed Microbiologist's picture

My state has gone full retard for years. I'm counting on the super volcano to solve everything.


Bigly's picture

I actually think you will be less screwed than the eastern part of the country due to the jet stream....

HRClinton's picture

Odds are, the next Carrington Event will happen much sooner. 

When the electricity goes...

any_mouse's picture

I voted Giant Meteor. I am going to Resist the Super Volcano.

carlnpa's picture

My local taxes have gone out of control in Adams County.

The farm in Clean and Green up 10% year, every year, for many years now.

No jobs for the kids, 2 of 3 gone (Texas and North Carolina) #3 not far behind.

exi1ed0ne's picture

I hear you.  You have to go where the work is, and a mobile society isn't a stable one.  It actively punishes home owners, so nobody has skin in the game to build a functional community.  The Tiny House movement might be overpriced hippy bullshit, but RVs were the largest Q1 purchase for a reason.

wisehiney's picture

TeePee in good state tonite Kemo Sabe.

WillyGroper's picture

looks like states won't matter with all that's been looted according to CAF.

they've stolen $40T & next it's all our assets.