Delaware ranks 38th in the newest edition of the Mercatus Center at George Mason University’s annual fiscal health rankings, falling eight places from last year. That was the largest drop among states.
The Mercatus Center is a free-market think tank. The center stated that the rankings as part of the first and most in-depth academic study of its kind, with findings based on the states’ recent financial reports
The report offered the following rankings and pithy observations:
- Cash Solvency: 20th – Does your state have enough cash to cover its short-term bills? Top 20!
- Budget Solvency: 46th – Is your state taking in enough revenue to cover its fiscal year spending? No, no it does not.
- Long-Run Solvency: 40th – Can your state meet its long-term spending commitments? Is it prepared for economic shocks or other risks? At least your not New Jersey.
- Service-Level Solvency: 46th – How much fiscal “slack” does your state have to increase spending if residents demand more services? Delaware’s “slack” is getting taut.
- Trust Fund Solvency: 10th – How much in debt, unfunded pension liabilities, or health care obligations does your state have? A bright spot for Delaware, top 10!
“Delaware’s cash position fell from 14th to 20th because of a decline in cash and pooled investments in FY 2014,” said author Eileen Norcross. “You shouldn’t have to be a budget expert to know where your state stands financially; these rankings give everyone that chance by putting complicated annual financial reports into context, while still allowing experts to take a deeper look at the numbers.”
States that rank highly can use the rankings as an early warning system to identify future problems, while states that do poorly can use them to forge a path forward, the report stated.
The Mercatus ranking comes after a previous report commissioned by the Delaware Business Roundtable that sees a growing gap between spending and revenues in coming years.
Delaware officials can also point to the state’s investment grade bond rating and the continuing use of a “rainy day fund” even during the 2009b recession. Public employees sought to tap the fund in an effort to get raises during the recession.
Mercatus and George Mason have been under fire for receiving funding from energy giant Exxon and Charles Koch, an industrialist who is well known for supporting conservative causes and Republican candidates.
Koch has been in the news for not being a supporter of Republican presidential front-runner Donald Trump.
