RANKED: The Most Financially Healthy US States

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RANKED: The Most Financially Healthy US States

So, the question becomes: Do we have data by which we can easily compare states on various economic and fiscal measures on an apples-to-apples basis? Instead of cherry-picking, can we look more broadly at the 50 states and compare them to one another?

Invictus, The Big Picture

www.businessinsider.com/the-most-financially-healthy-states-2014-7

Jul. 14, 2014, 6:29 PM

Paul Krugman recently wrote a piece about the “remarkable fiscal experiment” undertaken by Governor Sam Brownback in Kansas: “It sharply slashed income taxes without any clear idea of what would replace the lost revenue.”

The results in Kansas are not quite on plan, but that did not stop Stephen Moore from launching a broadside on the good professor.

Mr. Moore accused him of a tactic “that is all too typical of liberals: Cherry-picking a few events — the occasional high-tax state that is doing better than average, or a low-tax state that is falling behind — to blur the unmistakable pattern that low taxes (along with light regulation, energy production and right-to-work laws) have become magnets for people and businesses and jobs.”

Of course, Moore did a little cherry-picking of his own, making a quick comparison of employment in Texas and Florida to that of New York and California. But I digress.

So, the question becomes: Do we have data by which we can easily compare states on various economic and fiscal measures on an apples-to-apples basis? Instead of cherry-picking, can we look more broadly at the 50 states and compare them to one another? Can we satisfy Mr. Moore’s desire to take a more comprehensive look at how states are doing economically and fiscally? The answer is a resounding “yes.”

Time to revisit the very underutilized States Perform website and do a bit of number crunching.

The States Perform database contains information in the following broad categories, within which there are several relevant metrics.
•Fiscal & Economic
•Education
•Transportation
•Energy & Environment
•Public Safety & Justice
•Health & Human Services
•Supplemental Measures

Since we’re focused on economics, I selected the following four metrics that I think are among the most significant:
•Median Household Income
•Bankruptcy Filings per 1,000 Population
•Percent of Total Population In Poverty in the Past 12 Months
•Gross Domestic Product Per Capita by State

The simple methodology:

On two metrics — Median Household Income and GDP Per Capita — the higher the value, the better. On the other two metrics — Bankruptcy Filings per 1,000 Population and Percent of Total Population in Poverty in the Past 12 Months — the lower the value, the better. That said, I used the RANK function in Excel so the “best” in every category — higher or lower — garners a “1.” For example, Maryland garnered a “1” for highest median household income, while Alaska took a “1” for lowest Bankruptcy filings.

Point being, if you’re the governor, you always want to be #1. Hence, the top aggregate score any state can receive would be 1 x 4 categories = 4. Conversely, the worst aggregate score any state can receive would be 50 x 4 = 200. (I used the same methodology here three years ago when I took a look at Rick Perry’s Texas.)

So, with that out of the way, let’s have a look at how the states rank in these metrics among the blue and the red. Offered in descending order of Overall Score (i.e. worst at the top, best toward the bottom). I guess the good news for Mr. Moore is that Kansas is not one of the 15 red states firmly planted in the bottom 20.

NOTE: One should not assume that “present term” equates to “first” term; for many governors that is not the case.

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