The most economically stable states

Published: Sunday, Jan. 26 2014 10:53 p.m. MST

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"State fiscal condition is multifaceted and difficult to measure," reads the abstract to a working paper published this month by Georgia State University's Sarah Arnett.

However, by measuring and ranking the "cash, budget, long-run and service-level solvency" of every state during fiscal year 2012, Arnett believes it is possible to rank each state in the union according to fiscal condition, and in fact does so in the paper. Utah, according to Arnett, has the 11th most stable economy in the country.

"The ongoing challenges to state governments' abilities to meet their financial and service obligations underscore the need for a reliable and strait-forward method to compare states' finances," Arnett argues in the study. "Without such methods of comparison, those inside and outside state government are left to wonder about the emerging trends in state finances and how states compare to each other."

To rank each state, Arnett used data from each state's Comprehensive annual financial report for 2012. From the reports, Arnett focused on 11 key indicators, all of which measures one of four categories:

Cash solvency, which Arnett explains measures a state's ability to "pay its bills."

Budget solvency, which in effect measures the debt to surplus ratio of the state.

Long-run solvency, which measures a state's ability to "pay the cost of doing business."

Service level solvency, which measures a state's ability to pay for "service obligations."

"An important conclusion of this paper is that while rankings inherently have top performers and bottom performers," Arnett explains in the paper's conclusion, "there is a substantial difference in state fiscal conditions." That "substantial difference" according to Arnett, is worth understanding in order to "test the effect of fiscal institutions."

So which states came out on top in the study? We've compiled the list of Arnett's top 25 states for economic stability.
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Sandy, UT

Interesting list. Anyone notice that none of the top 25 are states on the far left of the political spectrum?

Cedar Hills, UT

The rank of "solvency" make sense. So those states which control what they would spend by measuring what they get rank higher; those states just spending voter's money without self-control rank lower.

American Fork, UT

The dakotas; alaska. Oil makes the world go.

Los Angeles, CA

It could also be that the way this person chose her definitions was motivated by a conservative bias. I would need to study the paper more before I would give it any credences. And RBB--correlation is not causation.

Chris B
Salt Lake City, UT

dmcvey, keep telling yourself there is no causation here.

Pure coincidence.

Kearns, UT

You are stretching there. I believe both party platforms have their strengths. Just for argument sake, let’s see how many of the states on this list went for Obama in the previous election; #25 Virginia, #24 Colorado, #23 Washington, #22 New Hampshire, #18 Iowa, #17 Wisconsin, #16 Nevada, #7 Ohio, and #6 Florida. It would be interesting to see how much each state invests in education, how much each state depends on tourism, and other factors that contribute to a good economy.

Stalwart Sentinel
San Jose, CA

Funny how nearly every single one of these "economically stable" states are net debtors when it comes to federal taxes paid vs federal monies received, this includes Utah. If there was any integrity in this study, the only states that could be considered would be the states that actually pay their own way (nearly 100% liberal); however, they've opted to choose conservative states that are literally subsidized by liberal federal tax dollars as the most economically stable. These are nearly all welfare states.

This is not a list of the most stable economies, were that true you'd see our banking and tech sectors included, ie NY and CA, Rather, this is a list of the states that are incapable of innovating or creating new markets so rather than compete with CA or NY (and lose) they instead opt to lower regulations and exploit their lands - a short-term plan indeed, if it can even be considered a plan.

Ron de Manati
Kennesaw, GA

It would be a hard-sell to say that Washington State is not on the political left.

Henry Drummond
San Jose, CA

I always find these lists puzzling. How can Nevada, which got hammered during the recession, be a "stable economy?" Mississippi also seems a strange choice with such high levels of poverty. I guess it depends on how you define "stable."

One Angry Salebarn Worker
Madison, SD

No oil in South Dakota Hutterite. Just corn, cattle and real Hutterites. In fact, if you were real Hutterite, you wouldn't own a computer.

By the way Stalwart, a bigger picture of the banking industry would have you revising your post. Check out SD's banking environment and explain in light of them apples.

Salt Lake City, UT


Excellent Point. To further your argument all of the top 5 states are solidly conservative and 13 of the top 15 are as well. The other two are swing states (Florida and Ohio) with Republican Governers and conservative legislatures.

I wonder why Liberal Utopias like Illinois, California, Massachussets and New York are not on the list... LOL

p e

Stalwart Sentinel, How about a test of your theory? Let's just all tell the fed to take their borrowed money and go home. Let's see which states survive longer, those on this list or those not on this list.

Farmington, UT

Stalwart, the Feds 88% of the lands in Nevada, 68% of the lands in Utah and 67% of the lands in Alaska. That costs federal money. It's not an indication of being a welfare state per your stats, just a case of having the worst possible landowner own at least 2/3 of your state.

Kings Court
Alpine, UT

Strange list. The criteria must be unstable because I don't see how some of these states, like Nevada, have a stable economy.

Stalwart Sentinel
San Jose, CA

p c - That would be great. To give you a precursor of what that would look like: California would currently have a $100B surplus while Utah's debt would be more than double it's current amount. Conservative states would finally be taken off their welfare to dry up and disappear.

WSUfan - You prove my earlier point: conservatives' only idea for "economic growth" is to exploit the land. There is nothing admirable in such subpar efforts. Further, your response does not account for the many, many other conservative states that are on the federal dole year in, year out.

Sandy, UT


Correlation is not necessarily causation, but it makes you wonder. Detroit is declaring bankruptcy. A number of other liberal cities have already gone down that path. California had to raise taxes to keep solvent, despite having about the highest tax rates in the country. Meantime, states like Utah are consistently recognized for getting the most for its tax money. Most "old timers" would tell you that you cannot spend your way to prosperity.

Provo, UT


I don't know what you're talking about. I agree that correlation is not equal to causation, but to say that there is lots of innovation in blue states and none in red is just blatant bias. There's lots of innovation in Utah. High-tech industry is very welcome in this state. Have you ever lived in some of the blue states out east? I have. Some of them fare better than others, but I can tell you that several states are losing businesses due to anti-business policies. One example is Rhode Island. The point is that there is innovation in both types of states. It's also worth noting that blue states often have the highest numbers on welfare as well as the highest unemployment rates. Connecticut is one example. All you need to do is visit some of these places to see that they are really struggling economically.

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