Alabama ranks among most fiscally healthy states in America

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Despite facing a perennial budget shortfall, a free-market think-tank has ranked Alabama in the top 15 states when it comes to “fiscal health.”

The Mercatus Center at George Mason University placed the Yellowhammer State in the No. 12 spot in the nation for its financial health.

The fourth annual report ranked states based on short- and long-term debt and other key fiscal obligations, such as unfunded pensions and healthcare benefits, revenues, expenditures, cash, assets, liabilities, and debt

Alabama fiscal ratios 2017

Alabama’s rank as an “above average” state is due to its high rankings in these categories. The state’s long-term liabilities were 3​2 percent of ​its ​total assets. ​Its ​revenues exactly match expenses, with the state showing a slightly improved net position of $1 per capita. Additionally, ​the state h​as between 4.13 and 5.53 times the cash​ ​needed to cover short-term liabilities, according to the study.

“Top-performing states tend to exhibit fiscal discipline in the form of having high levels of cash, maintaining revenues that exceed expenses, and keeping debt levels low relative to resident income,” according to the study. “These factors can easily be threatened if a state relies too heavily on narrow tax bases and volatile revenue sources or if pension plans are not adequately funded, leading to persistently large and growing liabilities.”

 Here’s a look at all of the rankings:
Mercatus Fiscally Healthy Rankings 2017
[Photo Credit: Mercatus Center]