> Debt per capita: $4,118 (15th highest)
> 2015 Unemployment rate: 4.4% (tied-16th lowest)
> Credit rating: Aa2/AA
> Poverty: 13.4% (22nd lowest)
Maine ended its most recent fiscal year with a $93 million budget surplus. State lawmakers rejected Gov. Paul LePage’s proposal to put the majority of the money in the rainy day fund, instead putting it towards benefits for retired state workers and other expenses in the current fiscal year. Maine’s rainy day fund total 3.5% of the state’s annual budget, a far lower share than the 6.2% average across all states.
Economic growth has been slow in Maine. Maine’s GDP increased by less than 0.5 percentage points in 2015, far slower than the 2.4% economic growth nationwide last year.
> Debt per capita: $1,522 (5th lowest)
> 2015 Unemployment rate: 5.2% (tied-25th highest)
> Credit rating: Aa1/AA
> Poverty: 19.1% (4th highest)
With a median household income of $41,995 a year, Arkansas is the second least wealthy state in the country. Arkansas is also one of just a few states without any reserve coffers. Despite lower resident incomes and limited savings, Arkansas has managed to maintain a fairly balanced budget without amassing large debt. The state’s debt is equivalent to just 19.4% of total revenue, far less than the 48.7% average across all states.
One reason behind the state’s lack of debt is its unique budgeting program, the Revenue Stabilization Act. The system, which allocates spending money to projects of various priorities based on conservative revenue forecasts, has resulted in full funding for all top priority projects in 30 of the past 36 years in the state. The budget process has largely been credited as one of the main reasons why the Arkansas economy remained in good health throughout the Great Recession.
> Debt per capita: $3,130 (23rd lowest)
> 2015 Unemployment rate: 5.0% (tied-23rd lowest)
> Credit rating: Aaa/AAA
> Poverty: 14.8% (tied-21nd highest)
Missouri is the lowest ranked state with a perfect credit rating from both Moody’s and S&P. Despite the state’s creditworthiness, Missouri has a relatively heavy debt burden, equal to nearly half its total annual revenue, or $3,130 per capita. If Missouri is to meet its debt obligation, it will not likely do so with high tax revenue. The state collects only $1,848 per capita, the sixth lowest per capita tax revenue of all states. Now serving his final term, Missouri’s Gov. Jay Nixon has led the state since taking office in 2009. He is leaving his successor, Gov.-elect Eric Greitens, a $200 million budget shortfall.
Like a number of other states towards the bottom of our ranking, Missouri is not especially safe. Last year, 497 violent crime were reported for every 100,000 state residents, among the highest rates of all states.
39. South Carolina
> Debt per capita: $3,082 (21st lowest)
> 2015 Unemployment rate: 6.0% (tied-10th highest)
> Credit rating: Aaa/AA+
> Poverty: 16.6% (11th highest)
South Carolina faces several significant socioeconomic challenges. Violent crime and poverty are far more common across the state than is typical nationwide. Additionally, the state’s 6% annual unemployment rate is one of the highest in the country. For South Carolina residents in need of work, conditions are not favorable. Though unemployment has dropped in 2016, South Carolina has one of the least inclusive unemployment insurance programs in the country. Only 13% of jobless workers receive unemployment insurance benefits, well below the 28% average recipiency rate across all states.
> Debt per capita: $9,254 (2nd highest)
> 2015 Unemployment rate: 5.6% (tied-19th highest)
> Credit rating: Aa3/AA-
> Poverty: 10.5% (6th lowest)
The typical Connecticut household earns $71,346 annually, the fifth most of any state. Despite a wealthy tax base, Connecticut is able to meet just over half of its pension obligations, a larger funding gap than any state other than Illinois, Kentucky, and New Jersey. The state failed to save cash for its pension from 1930 to 1980, which in turn hindered the government’s ability to capitalize on the stock boom of the 1990s that helped most state pensions reach full funding. Connecticut has since reduced many of the pension benefits for future retirees and has also increased taxes to help cover the budgeting shortfall.
Connecticut’s budget problems extend beyond its pension liabilities. It is one of just four states in which total debt has surpassed annual revenue. It also has one of the smallest rainy day funds of all states. Connecticut’s financial difficulties may continue as its tax base shrinks. The state lost 0.5% of its population to outbound migration over the last five years, among the most of any state.
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