Special Report

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

Source: Thinkstock

36. Arkansas
> 2016 Unemployment: 4.0% (15th lowest)
> Pension funded ratio: 82.4% (15th highest)
> Credit rating and outlook: Aa1/Stable
> Poverty: 17.2% (6th highest)

Most states maintain a rainy day fund as a safeguard for meeting budgetary obligations in the event of falling tax revenue, but not Arkansas. The state is one of only two without any savings.

The state also struggles more than most with serious crimes. There were 551 violent crimes in Arkansas for every 100,000 residents in 2016, more than in the vast majority of states and well above the U.S. violent crime rate of 386 per 100,000. While the prevalence of crime can be the result of a range of factors, it can also be indicative of ineffective policing and correctional facilities.

Source: Thinkstock

37. Alaska
> 2016 Unemployment: 6.6% (2nd highest)
> Pension funded ratio: 67.5% (19th lowest)
> Credit rating and outlook: Aa3/Negative
> Poverty: 9.9% (6th lowest)

Crime rates are subject to a wide range of factors — many of which are outside of the government’s control. Still, rampant crime can be indicative of ineffective policing and rehabilitation programs. Despite allocating larger than typical shares of its budget to law enforcement and correctional facilities, Alaska is the most dangerous state in the country. There were 804 violent crimes for every 100,000 state residents in 2016, more than double the 386 per 100,000 U.S. violent crime rate.

An oil-rich state, Alaska has historically relied on tax revenue from resource extraction. Following the steep drop in oil prices in 2014, the state has struggled to balance its budget. Since the price plunge, lawmakers in Alaska have debated a range of options to meet budgetary obligations including drawing from the state’s Permanent Fund, cutting spending, and enacting an income tax. Currently, the state’s credit rating from Moody’s is less than perfect with a negative outlook.

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38. Connecticut
> 2016 Unemployment: 5.1% (16th highest)
> Pension funded ratio: 49.4% (4th lowest)
> Credit rating and outlook: Aa3/Negative
> Poverty: 9.8% (4th lowest)

Connecticut has fallen considerably on this list. Ranking 20th best as recently as 2010, Connecticut is now on the brink of making the 10 worst run states. Like many of the worst run states, Connecticut is losing residents. In the 12 months between July 2015 and July 2016, nearly 13,000 more people left Connecticut than moved in. Fewer residents means fewer taxpayers, and Connecticut is already borrowing heavily. The New England state’s debt is equal to nearly $10,000 per resident, more than nearly all states with the exception of Massachusetts, its neighbor to the north.

The state’s budget problems do not stop with debt. Connecticut is one of only four states with just half of its pensions funded.

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39. Missouri
> 2016 Unemployment: 4.5% (22nd lowest)
> Pension funded ratio: 81.4% (16th highest)
> Credit rating and outlook: Aaa/Stable
> Poverty: 14.0% (22nd highest)

Government policies can have a considerable effect on the economy and can often either encourage or stifle growth. Missouri lawmakers may need to revisit the state’s economic policy as the state’s GDP expanded by only 0.3% in 2016, one-fifth of the nationwide economic growth of 1.5%. Despite the limited growth, joblessness is less of a problem in Missouri than it is in most states. The state’s unemployment rate fell from 4.6% in October 2016 to only 3.5% in October 2017.

Missouri does not appear to prioritize access to health care for its neediest residents. The state is one of a minority of states to not accept federal funds to expand Medicaid. Partially as a result, some 8.9% of state residents are uninsured, a larger share than in most states.

Source: Thinkstock

40. Kentucky
> 2016 Unemployment: 5.0% (18th highest)
> Pension funded ratio: 37.8% (2nd lowest)
> Credit rating and outlook: Aa3/Stable
> Poverty: 18.5% (4th highest)

While the availability of jobs is subject to a range of factors, including some outside of a government’s control, a low unemployment rate can be indicative of sound economic policy. Kentucky’s October 2017 unemployment rate of 5.0% is well above the comparable 4.1% U.S. monthly unemployment rate. The state’s unemployment is higher than average even as the labor force has shrunk. In the last half decade, the number of workers in Kentucky fell by 3.1%, nearly the largest decline of any state.

Like many of the worst run states, Kentucky is failing to meet its pension obligations. Only 37.8% of the state’s pension system is funded, the second worst pension funded ratio among states.

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