New Mexico finishes 26th in national study on fiscal health

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE, N.M. — In a recent study ranking the fiscal health of all 50 states, New Mexico fell somewhere in the middle.

Sarah Arnett of the Mercatus Center, a fiscally conservative policy group at George Mason University, looked at four measures of each state’s financial numbers — cash solvency, budget solvency, long-run solvency and service-level solvency.

By combining all four indices, New Mexico finished 26th in the country.

The Land of Enchantment‘s best results came in budget solvency —seventh-best in the U.S. — and long-run solvency — 11th best — while finishing 27th in cash solvency and 41st in service level solvency.

“Service-level solvency is the most difficult to measure because it reflects whether state governments have the resources to provide their residents with an adequate level of services,” Arnett’s working paper said. “A state’s service-level solvency is measured using taxes and revenue per capita, along with expenditures per capita.”

Overall, the study says most states aren’t doing enough to address their respective fiscal problems.

“Despite recent gains in tax revenues and pension assets, the long-term outlook for states’ fiscal condition is negative,” Arnett wrote. “These simulations predict that states will have yearly difficulties balancing revenues and expenditures due, in part, to rising health-care costs and the cost of funding state and local pensions.”

Here’s a look a the state that finished in the Top 10 overall:

States finishing in the bottom 10, which include Illinois, New York and California, lag in a number of other studies on state fiscal issues:

Click here to look at the maps of the four indices, and click here to read the details of the working paper.

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

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