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.

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2nd. North Dakota

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%.

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3rd. Iowa

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%.

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4th. Vermont

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.

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5th. Minnesota

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.

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6th. Utah

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.

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7th. Virginia

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8th. New Hampshire

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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.

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9th. Maryland

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.

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10th. Hawaii

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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.

Falling just short of our top ten overall meta rankings, Delaware does fall within the top ten best in median household income, health insurance, and percentage of people below the poverty line. The “first” state also ranks first in GDP per capita. However, it suffers from one of the worst violent crime rates in the country (47th) with 706 violent crimes committed per 100,000 people each year.

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12th. Nebraska

Nebraska, as with many Midwestern states, has an extremely low unemployment rate.  As of August 2010, the unemployment rate was 4.60%, the third lowest in the country.  The state also boasts a high rate of people 25 and over who have graduated from high school, 89.8%.

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13th. South Dakota

Like most of the states in the Northern Midwest, South Dakota has been a haven of employment in a country which has otherwise been plagued by joblessness. With a low unemployment rate of 4.5%, the home of Mount Rushmore is second only to its name-sharing neighbor to the north. Unfortunately, it falls about average in most other categories, aside from having one of the highest rates of obesity in the country.

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14th. Alaska

While maintaining an above average overall ranking on our list, Alaska has a number of metrics for which its rank is an extreme. The Great Land has the second lowest percentage of population below the poverty line, the third highest percentage of people over 25 who have graduated from high school, and the fourth highest median income per household.  At the same time, however, tit has the third highest percentage of residents without health insurance and the absolute highest debt per capita, $14,260.

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Washington, the Evergreen State, just missed being in the top ten for median household income, ranking eleventh with a reported amount of $56,548 for 2009.  Unfortunately, the state is also plagued by an extremely high debt, which has only increased throughout the recession.

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16th. Kansas

Kansas is noteworthy for the fact that is unremarkable. The state ranks seventh in unemployment, with a rate of 6.6%.  Aside from this, the state has fairly mediocre rankings across the board.

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The state, known for its lobsters and rocky shores, ranks tenth in high school completion. “Vacationland,” as it’s called, also happens to have the lowest violent crime rate in the country, with only 119 violent crimes committed per 100,000 people. It ranks in the middle for most other categories, however the state ranks a meager 40th in GDP per capita.

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18th. Wisconsin

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19th. Massachusetts

Massachusetts is a good example of a state which falls towards the median range of our ranking, not because it is either high or low in its metrics overall, but because it does very well by some measurements and very poorly by others. It is third in GDP per capita, seventh in poverty level, sixth in median household income, and, at 4.2%, has the smallest percentage of its residents without health care coverage. On the other hand, it is 49th in debt per capita, at $14,079 for each citizen, and it had the sixth-worst decline in home value from 2006 to 2009.

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20th. Connecticut

Connecticut, often noted as a state with many affluent communities, excels in a number of areas related to wealth.  The state has the fourth smallest population below the poverty line and ranks third for highest median household income.  However, they rank 46th in debt per capita, at $10,457.

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22nd. Pennsylvania

The Keystone State enjoys a positive reputation among many, as shown by housing prices which rose 13.4% between 2006 and 2009 – the seventh highest increase in the country.  Unfortunately, the state has one of the nation’s most severe debts, at $9,410 per capita.

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23rd. North Carolina

North Carolina rates slightly below average in most statistics. However, the Tar Heel State ranks ninth in both debt per capita and property value change since 2006.

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24th. Missouri

Missouri’s rankings are all fairly average, rarely managing to fall in either the top ten or the bottom ten. The state does, however, boast a AAA S&P rating, the highest rating that the credit agency can confer.

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26th. New York

New York is another middle-of-the-road state characterized by extremes. The Empire State ranks second in GDP per capita ($49,370 per person) but has the second worst debt per capita ($13,804 per person). New York’s legislative body has been plagued by budget deadlocks, political scandal and resignations.

Oregon, on average, is a fairly well-run state.  It has, however, been hit extremely hard by unemployment, with reported rates of 10.6% for August, 2010.

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28th. Idaho

With the exception of having a low crime rate and the lowest debt per capita in the country, The state known for its potatoes and vast wilderness has an otherwise unremarkable resume. The state falls in the 30s and 40s in most other metrics.

Despite earning a AAA rating from S&P, Indiana ranks 25th in debt per capita and 34th in home value. At 10.2%, the Hoosier State also has one of the worst unemployment rates in the country, ranking seventh from the bottom in this category.

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30th. Montana

Montana has the 46th lowest GDP per capita in the country, reportedly $27,952. To its credit, 90.8% of residents 25 and old have a high school degree, the sixth highest rate in the country.

While Ohio manages to reach 14th lowest debt per capita, it has an otherwise below average score in every other category. Notably, the Buckeye State ranks 41st in unemployment at 10.1%, and 35th in poverty, with 15.2% below the poverty line.

Oklahoma ranks very well in many categories.  It has the fifth-lowest debt per capita, with only $4,595, and fifth for occupied home value, which increased 14% from 2006 to 2009.  At the same time, however, the “Sooner State” has the 45th lowest median income per household. 18.7% of the state’s population also does not have health insurance; the 44th worst rate in the nation.

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Georgia ranks in the lower 30s or worse in nearly every category, and is 45th in health insurance coverage, with 19.1% of the state’s citizens without protection. The Peach State’s only saving grace is a surprising seventh lowest debt per capita.

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34th. Rhode Island

Rhode Island ranks 34th on our list, but it has the fourth-worst debt per capita in the country. The state also has an unemployment rate of 11.8%, the third-worst in this category. All the same, the state manages to maintain a fairly high median household income (16th highest) and a relatively small percentage of the population below the poverty line (13th lowest).

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35th. Tennessee

Tennessee is another state of extremes. It ranks 41st in high school graduation, 44th in median household income, and 48th in violent crime rates. However, property values increased 14% from 2006 to 2009, ranking it 14th, and the volunteer state also has the 11th lowest debt per capita.

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37th. New Mexico

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Occupied home values increased 14% from 2006 to 2009, putting the state in sixth place for this category. This anomaly, however, has little to do with the health of the state’s economy or living conditions. Ranked 47th in the category, 18% of New Mexico’s population is below the poverty line. It also has the sixth-worst violent crime rate, with 656 violent crimes per 100,000 people.

West Virginia is known for its lumber and coal industries and has been the site of massive labor unrest.  The state has the second to lowest GDP per capita in the country at $49,993. It also has the second-lowest median household income. The state does, however, possess the eighth-lowest debt per capita, at only $5,406 per citizen.

For a state so far down in our ranking, Alabama does surprisingly well in many categories, making the top fifteen in debt per capita and increase in home value. The reason it falls so far down the list is the intense poverty that plagues the state. It ranks 46th in median household income, and there are several counties in the state which have more than 30% of the population below the poverty line. Only one county in Alabama has a poverty rate in the single-digits.

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Like Alabama, Arkansas is not a completely broken state. It ranks 16th in unemployment and third in debt per capita. However, it has the third-worst median household income ($37,823) and GDP per capita ($27,426) and is second only to Mississippi, with 18.8% below the poverty rate.

Nevada has experienced particularly rough times, largely due to the recession’s impact on tourism to Las Vegas. The value of occupied homes has decreased an astounding 34.1%, the worst in the country. The state also has 14.4% unemployment, which is the highest in the country.  On top of all of this, violent crime rates are extremely high (at 727 per 100,000) making Nevada the second to most violent state in the country.

Despite receiving the ninth-lowest rank, Florida maintains an amazing AAA rating from S&P, which is the only reason it didn’t rank as the worst state on our list. From 2006 to 2009, property values in the sunshine state dropped 20.9%, making it the third-worst in that category. Despite its significant number of older residents, Florida also ranks 47th in health insurance coverage and has the fourth-worst violent crime rate.

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43rd. Illinois

Illinois finds itself with such a low ranking in part due to its high unemployment (10.10%) and in part due to its high debt per capita ($9,613.)  The state also suffers from poor fiscal governance, however, and received a credit rating of A+, the second worst S&P rating granted to all the states.

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Tied for 44th. Mississippi

Mississippi suffers from a cycle of poverty and poor education.  The state has the second lowest amount of citizens 25 and older with high school diplomas – only 80.4% graduate.  The state also has the greatest percentage of citizens living below the poverty rate, 21.9%, and the lowest GDP per capita, $24,293.  Also, Mississippi residents suffer from the highest rate of obesity in the country.

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Tied for 44th. South Carolina

South Carolina has done an admirable job at marketing itself as a tourist destination, and has the 10th best improvement in property values from 2006 to 2009. In terms of the economy, however, the Palmetto State is in the bottom ten in median household income, high school completion, and poverty rates. The state has the worst violent crime rate in the country- 731 per 100,000.

While Louisiana ranks in the bottom 20% of states for most of the categories considered, including violent crime rate, percentage of people below the poverty rate, percentage of people 25 years and older who have completed high school, and median household income, the state remains an attractive place for many people to live.  It ranks third for occupied home value, boasting an increase of 18% between 2006 and 2009.

Michigan, the home to America’s devastated auto industry, has the second-worst unemployment rate in the country, standing at 13.8%. The state is one of only six to be rated by S&P as having a credit rating of AA- or worse, likely due to the state’s unemployment crisis, as well as high crime rates and one of the worst drops in occupied home value in the country.

Debt per Capita: $6,607 (18th)

Arizona, showing up near the end of our rankings, suffers most severely from its poor S&P rating of AA-, which is second only to California, and the fact that between 2006 and 2009, occupied home prices dropped 20.6%.  Aside from these two points the state does not have particularly low standing in any category. It ranks so low because of its poor ratings in all categories.

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49th. California

Although Kentucky doesn’t place 50th in any one category, its overall poor scores secures its place as the worst-run state on our list. It is 43rd in GDP per capita, 47th in median household income, 47th in citizens with high school diplomas, and, at 18.6%, is 48th for percentage of the population below the poverty line.  Kentucky also has an extremely weak S&P rating of AA-, supporting our assessment that it is the worst-run state in the country.

Methodology:

24/7 Wall St. considered data from a number of sources, including Standard & Poor’s, the Bureau of Labor and Statistics, the National Conference of State Legislators, the Bureau of Economic Analysis, and the National Association of State Budget Officers.  The Bureau of Labor Statistics provided unemployment data, and the Bureau of Economic Analysis provided GDP per capita. Credit rating agency Standard & Poor’s provided credit ratings for all 50 states. A significant amount of the  data we used came from the U.S. Census Bureau’s American Community Survey. Data from ACS included violent crime rate, unemployment rate, GDP per capita, percent below the poverty line, high school completion for those 25 and older, median household income, debt per capita, percent of the population without health insurance, and the change in occupied home values from 2006 to 2009.  The ACS released its 2009 numbers on Tuesday, September 28th, 2010. These are the values we used in our survey.  Once we reviewed the sources and compiled the final metrics, we ranked each state based on its performance in all the categories.

Douglas A. Mcintyre, Ashley C. Allen, Charles B. Stockdale, Michael B. Sauter