How well run are America’s fifty states? 24/7 Wall St. has taken several months to consider that question. Our writers looked at hundreds of data sets ranging from debt rating agency reports to violent crime rates, unemployment trends and median income. Of those, we chose what we considered to be the 10 most important ranking of financial and overall government management. The best run state is Wyoming. The Worst is Kentucky. The standing of each is supported by their ranking in the data sets we considered, as are the rankings of all fifty states.
24/7 Wall St. has completed one of the most comprehensive studies of state financial management ever performed by the mainstream media. It is based on evaluation principles used in the award-winning Best Run States In America ratings published by the Financial World Magazine during the 1990s. These studies were used by state governments to evaluate the efficiency of their own operations. The new 24/7 Wall St. study is meant to help businesses and individuals examine state operation with an unbiased eye.
The work involved in comparing states is challenging. This is due the volume of the data and the many ways it can be interpreted. A comparison is made even more difficult because state governments have advantages and disadvantages that may be decades old. These include the presence of natural resources, the the decisions by large companies to locate or leave and the extent to which populations are rural or urban. Populations of some states have changed very little. Other states have added or lost hundreds of thousands of people in the last decade. Many border states accommodate large numbers of immigrants.
Ultimately, however, states can control their own destinies. Well-run states have a great deal in common with well-run corporations. Books are kept balanced. Investment is prudent. Debt is sustainable. Innovation is prized. Workers are well-chosen and well-trained. Executives are picked based on merit and not “politics.”
24/7 Wall Street identified surveys with complete data sets for each state. Using this data, our formula ranked each state giving weight to metrics that are most important to prudent governance. In addition to traditional fiscal information, including GDP per capita, debt per capita, and and credit rating, our analysis also showed the impact of state policies on its residents. Combined, this created a complete picture of the “state of each state.” A fuller accounting of out methodology can be found at the end of the article.
The 24/7 Wall St. State of the States is meant to be an analysis that will refocus the debate on state management and financial operations in a period when the future of all 50 states is at stake, just as the future of the country is uncertain.
Debt per Capita: $4,310 (2nd)
Unemployment Rate: 6.8% (8th)
Home Price Change (’06 – ’09): 23.6% (1st)
Median Household Income: $52,664 (19th)
Wyoming comes in first place in 24/7 Wall St.’s Best Run States. Falling in the top fifteen in every metric, including sixth in debt per capita and second in percent below the poverty line. The only two flaws in the state’s record is median income, where it ranks 19th, and health insurance coverage, where it ranks 32nd. It also ranks first in high school completion. With just over half a million residents, it is the least populous state.
Debt per Capita: $5,651 (10th)
Unemployment Rate: 3.7% (1st)
Home Price Change (’06 – ’09): 17.2% (4th)
Median Household Income: $48,827 (27th)
North Dakota, which ranks second on our list, owes much of its success to a well-managed state economy. It is one of only two states in the country with a budget surplus, and in 2008 its economy grew 7.3% – double that of any state other than Wyoming, which grew 4.4%. The state also has the tenth lowest debt per capita in the country and has the lowest unemployment rate in the U.S., at just 3.7%.
Debt per Capita: $5,138 (6th)
Unemployment Rate: 6.8% (8th)
Home Price Change (’06 – ’09): 8.3% (22nd)
Median Household Income: $48,044 (26th)
Iowa ranks 7th in education, with more than 90.5% of 25-year-olds having completed high school or the state equivalent. It is also sixth in lowest debt per capita and has the third-lowest rate of citizens without health insurance, with only 8.6% without coverage. While the Hawkeye State may be known for its corn fields, its economy is meaningfully supported by The University of Iowa. According to the university, it is one of the state’s top employers and supports over 51,000 jobs, both “directly and indirectly ” – more than 1 in 30 of the state’s total jobs. Iowa’s governors have been smart to invest heavily in the institution, and have reaped the benefits: the state ranks eighth lowest in the U.S. for unemployment, which stands at 6.8%.
Debt per Capita: $6,983 (23rd)
Unemployment Rate: 6% (5th)
Home Price Change (’06 – ’09): 12.1% (12th)
Median Household Income: $51,618 (20th)
Vermont, the second smallest state in the nation, has the third smallest debt, due in part to its tendency to budget conservatively. The state also boasts the third smallest percentage of people without health insurance and the second lowest rate of violent crime: only 137.5 reported cases per 100,000 people.
Debt per Capita: $7,909 (32nd)
Unemployment Rate: 7% (10th)
Home Price Change (’06 – ’09): -3.7% (41st)
Median Household Income: $55,616 (12th)
Recently run by a former professional wrestler, the North Star state maintains a well-governed economy. Minnesota ranks in the top ten in GDP per capita, health insurance coverage, and high school completion. It also has the tenth best unemployment rate, 7%. The notably low unemployment rate is due in part to the government’s use of funds from the recovery bill to restore 200,000 of the jobs lost during the recession.
Debt per Capita: $6,007 (15th)
Unemployment Rate: 7.4% (14th)
Home Price Change (’06 – ’09): 19.2% (2nd)
Median Household Income: $55,117 (14th)
Utah is a very well-run state in the fiscal sense, earning it the highest S&P rating granted to states, AAA. Unemployment claims were down 3.5% as of August 2010, and 19,000 new jobs were created. This steady economy has come in handy and may have contributed to an increased desire to live there – occupied home prices increased 19.2% from 2006 to 2009, the second highest increase on our list.
State Credit Rating
(March 26, 2010): Provided by Standard and Poor’s media relations department
Debt per Capita: $6,939 (22nd)
Unemployment Rate: 7% (10th)
Home Price Change (’06 – ’09): 3.4% (31st)
Median Household Income: $59,330 (8th)
Virginia is in the top ten in median household income, percentage of population below the poverty line, violent crime rate, and unemployment. Like many of the other states on the top of our list, it also maintains an AAA rating from S&P. Virginia’s savvy marketing has resulted in a 16% increase in state tourism in a year, the highest of any state in the U.S. Department of Commerce’s 2009 Overseas Visitation to U.S. States, Cities and Traveler Characteristics Data report.
Debt per Capita: $7,946 (33rd)
Unemployment Rate: 5.7% (4th)
Home Price Change (’06 – ’09): -1.4% (38th)
Median Household Income: $60,567 (7th)
New Hampshire stands out in many categories. Only 8.5% of the state’s population lives below the poverty line, the lowest rate in the country. The state also has the third lowest rate of violent crime. It was not as badly hit by the recession as many other areas of the country.
Debt per Capita: $6,661 (20th)
Unemployment Rate: 7.3% (13th)
Home Price Change (’06 – ’09): -4.8% (42nd)
Median Household Income: $69,272 (1st)
One of only two Northeastern states in the top ten, Maryland benefits from having the highest median household income in the country, as well as the third-lowest poverty rate, with 9.1% below the poverty line. However, the Old Line State ranks eighth-worst in both violent crime rate and property devaluation, with a 4.8% drop from 2006 to 2009.
Debt per Capita: $8,064 (35th)
Unemployment Rate: 6.4% (6th)
Home Price Change (’06 – ’09): -2.3% (39th)
Median Household Income: $64,098 (5th)
Hawaiians live well, earning the state the tenth spot on our list. The state, referred to as the Paradise of the Pacific, has the second lowest percentage of residents without health insurance and, as of 2009, the fifth highest median income per household in the country. Unfortunately tourism, the island’s number one industry, dropped significantly during 2008 and 2009 due to the recession. The numbers seem to be returning, however, and the Hawaii Tourism Authority reports a 30% increase in visitor spending from August 2009 to August 2010.