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Politics

Florida Among Top Five States in Healthiest Fiscal Condition

July 7, 2015 - 7:30pm

Good news for Florida: a new study released Tuesday shows Florida is in the top five for the nation’s healthiest states financially.

The Mercatus Center at George Mason University took a deep look at several factors impacting a state’s fiscal health and compiled its findings into a ranking system based on short- and long-term debt and other key fiscal obligations, including unfunded pensions and health care benefits.

The ranking of all 50 states is based on their “fiscal solvency” in five separate categories:

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 should citizens demand more services?

Trust fund solvency. How much debt does a state have? How large are its unfunded pension and health care liabilities?

Florida ranked in the top five for states with low debt and spending, placing behind Alaska, North Dakota, South Dakota and Nebraska.

The study pointed to a strong cash revenue (most of which was generated from Florida’s sales tax) as a strong contributor to the state’s strong cash position. According to the study, Florida’s total taxes, revenues, and expenses as a percentage of total state personal income are relatively low compared to other states, at 4 percent, 10 percent, and 9 percent respectively, and account for Florida’s fourth-place ranking in service-level solvency.

The new report came as particularly good news for Gov. Rick Scott, who has championed Florida’s job growth and general economic state since he took office in 2010.

“By paying down debt, maintaining a healthy pension system, balancing our budget and building our reserves, Florida’s economy is growing so we can make important investments in our families and ensure our state is in great financial shape,” said Scott Tuesday. “Florida has become a global beacon for business, and created over 879,000 new private-sector jobs in a little over four years. We will continue to work every day to make Florida the best place for business and to get a great job.”

House Speaker Steve Crisafulli agreed, applauding Florida's top ranking on the report.

"Florida is committed to fiscal responsibility," Crisafulli told Sunshine State News. "Our focus on balancing the budget, cutting taxes, and keeping money in reserves is securing a stronger future for Florida, and I am pleased to see our state ranked in the top five for our fiscal health."

View the full report here.

Reach Tampa-based reporter Allison Nielsen by email at allison@sunshinestatenews.com or follow her on Twitter: @AllisonNielsen

 

 

 

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