Mass. near bottom in fiscal health ranking
Decisions at the state house contributed to the state's ranking.
Massachusetts ranks behind only Connecticut in a survey of all 50 states' fiscal health released by Wednesday by the Mercatus Center at George Mason University.
The researchers grouped the Bay State with Connecticut, Illinois, New Jersey and Kentucky, states with "ongoing structural deficit problems in addition to long-term debt and pension pressures."
Massachusetts budget-writers for years have sought to wean the state off the use of nonrecurring revenues. This year state officials are trying to replenish state reserves and continuing their efforts to move transportation employees off debt-financed capital budgets and into operating budgets.
Basing its findings on comprehensive annual financial reports from 2014, the center's researchers measured all 50 states and Puerto Rico against 14 metrics intended to "assess the extent to which the states can meet short-term bills and longer term obligations."
The center, which seeks market-driven public policy solutions, found that revenues cover 96 percent of expenses in Massachusetts, leaving a per capita deficit of $342. Massachusetts is "reliant on debt financing," with a total debt of $26.73 billion, unfunded pension liabilities of $94.45 billion and other post-employment benefits adding $15.38 billion to the total.
The fiscal 2017 budget, approaching $40 billion in spending, has yet to be finalized. The academic center's analysis appears to diverge from the outlook of one of the major credit rating agencies.
Moody's puts Massachusetts among 17 states with its second-highest rating, behind 14 states enjoying the top AAA rating. Another 16 states rate below Massachusetts, according to Moody's. Nebraska, South Dakota and Wyoming have no general obligation debt, according to the agency.
Eileen Norcross, an author of the study, said it gave "more weight to the short run than to the longer term," and in fiscal 2014 Massachusetts had a "very poor cash position."
The Bay State does "a little better" on longer-term obligations, while its reserves are lacking and it has "a lot of debt," Norcross told the News Service.
"They're not necessarily recession-ready," Norcross said.
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