The Best and Worst Run States in America: A Survey of All 50

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46. Alabama
> Debt per capita:
$1,867 (8th lowest)
> Credit rating (S&P/Moody’s): AA/Aa1
> Unemployment rate: 5.9% (9th highest)
> Median household income: $42,830 (4th lowest)
> Poverty rate: 19.3% (4th highest)

Alabama’s poor social and economic outcomes led to its rank as the fifth worst-run state. Alabama’s per capita tax revenue is only $1,911 — a smaller amount than in all but a handful of other states. The state’s weak tax revenue is due in part to low incomes among its residents. The typical Alabama household makes just $42,830 annually, significantly less than the national average of $53,657. Furthermore, nearly one-fifth of state residents live below the poverty line, a higher poverty rate than in all but three other states. Also, Alabama’s 5.9% unemployment rate is among the highest in the country. Benefits for the state’s unemployed workers are among the lowest in the nation. Across the country, the average unemployment insurance beneficiary receives about $321 a week. In Alabama, the average weekly unemployment insurance payout is only $214.

Economic growth in the state is sluggish. While the national economy expanded by 2.2% in 2014, Alabama’s economy grew by only 0.7% in the same time period.

47. Rhode Island
> Debt per capita:
$9,068 (2nd highest)
> Credit rating (S&P/Moody’s): AA/Aa2
> Unemployment rate: 5.3% (17th highest)
> Median household income: $54,891 (19th highest)
> Poverty rate: 14.3% (24th lowest)

After Massachusetts, its neighbor to the north, Rhode Island’s debt per capita is the second highest in the nation, contributing to its rank as the fourth worst-run state. While the average state debt per capita across all states is $3,567, Rhode Island’s debt is equal to $9,068 per state resident. With a dwindling tax base, conditions may get worse in the Ocean State before they get better. Rhode Island lost roughly 0.3% of its total population to people relocating from 2010 through 2014, making it one of 12 states with more people moving out than moving in. The population decline likely contributed to the even sharper drop in property values. Home prices in Rhode Island decreased by 7.3% over roughly the same time period, the fourth steepest drop in the country.

Budget allocation in Rhode Island may not be efficient. While the state spends much more on government than is typical, at 5.4% of its annual budget, the government sector actually detracted 0.2 percentage points from the state’s 2014 GDP growth, a larger drag than in all but six other states.


48. Mississippi
> Debt per capita:
$2,376 (15th lowest)
> Credit rating (S&P/Moody’s): AA/Aa2
> Unemployment rate: 5.9% (9th highest)
> Median household income: $39,680 (the lowest)
> Poverty rate: 21.5% (the highest)

It may not be surprising to find what may be the worst economy in the country ranked as the third worst-run state. The typical household in Mississippi earns just $39,680 a year, the lowest such amount in the country. Similarly, 21.5% of Mississippi residents live in poverty, the highest poverty rate nationwide. The job climate is also dismal. Mississippi’s unemployment rate of 5.9% is the ninth highest in the nation. From 2010 through 2014, the state’s workforce shrank by 5.4%, while the country’s workforce grew by 6.7%. In the same time period, as a result of people moving in and out of the state, Mississippi’s total population shrank by 0.6%, the fifth largest net migration decline of any state.

49. Illinois
> Debt per capita:
$4,942 (11th highest)
> Credit rating (S&P/Moody’s): A-/Baa1
> Unemployment rate: 5.4% (16th highest)
> Median household income: $57,444 (17th highest)
> Poverty rate: 14.4% (25th lowest)

Illinois collects more than $3,000 per capita in state and local taxes each year, one of the highest per capita tax revenues. Yet, the state’s fiscal management system does not appear to be operating optimally, which is the main reason it ranks as the second worst-run state. For example, Illinois has one of the smallest rainy day funds compared to other states, at 1% of its general annual budget — an indication the state may not be able to satisfy its short-term obligations. Illinois’ debt is equal to more than three-fourths of its annual revenue, also one of the highest shares in the nation. Similarly, the state’s pension fund is not financially healthy. The state only has assets on hand to meet 39% of its pension obligations, the lowest ratio of any state. Perhaps as a result of the state’s finances, Illinois has the worst credit rating and outlook from S&P and Moody’s of any state.

The housing market in Illinois is also struggling. One in every 73 housing units is in some state of the foreclosure process, nearly the highest foreclosure rate in the country. As is often the case in states with particularly high foreclosure rates, home prices in Illinois have dropped by more than 10% from 2010 through last year. This decline was the worst in the country during that time.

50. New Mexico
> Debt per capita:
$3,468 (22nd highest)
> Credit rating (S&P/Moody’s): AA+/Aaa
> Unemployment rate: 6.8% (2nd highest)
> Median household income: $44,803 (8th lowest)
> Poverty rate: 21.3% (2nd highest)

New Mexico is the worst-run state in the country with some of the worst social and economic outcomes. Only a handful of states struggle with similar levels of extreme poverty as New Mexico. More than one in every 10 households in the state earns less than $10,000 each year, the second highest proportion after Mississippi. The state also struggles with one of the nation’s highest violent crime rates. Close to 600 violent crimes are reported each year per 100,000 state residents, one of the highest rates nationwide.

Like a number of other states towards the bottom of this list, more people left New Mexico than arrived from April of 2010 through the middle of last year. Only Illinois reported a larger net population decline over that period.