Special Report

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

Samuel Stebbins

Source: Sean Pavone / Getty Images

11. Massachusetts
> 2018 unemployment: 3.3% (14th lowest)
> Pension funded ratio: 59.9% (10th lowest)
> 1 yr. GDP growth: 3.1% (13th highest)
> Poverty rate: 10.0% (8th lowest)
> Moody’s credit rating and outlook: Aa1/Stable

Massachusetts ranks as the best-run state in the Northeast and the 11th best run nationwide. With an uninsured rate of just 2.8%, Massachusetts has done a better job of ensuring its residents have access to health care than every other state in the country. For context, 8.9% of Americans nationwide lack health insurance. Massachusetts also has a relatively strong job market, with an annual unemployment rate of just 3.3%, compared to a 3.9% national rate.

The low jobless rate is likely tied to rapid economic growth. Between 2017 and 2018, Massachusetts’s economy grew by 3.1%, faster than most states.

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12. Georgia
> 2018 unemployment: 3.9% (25th highest)
> Pension funded ratio: 79.2% (16th highest)
> 1 yr. GDP growth: 2.4% (24th lowest)
> Poverty rate: 14.3% (12th highest)
> Moody’s credit rating and outlook: Aaa/Stable

Georgia ranks as the second best-run state in the South, trailing only Texas, and the 12th best nationwide. People are moving to Georgia faster than most other states, and growing demand for housing has driven up property values. In the last year alone, the typical home in the state appreciated by 9.3%. Over the same period, the median home value nationwide climbed by just 5.6%.

Many states take on large amounts of debt to fulfill budget obligations, but Georgia does not. The state’s outstanding debt is equal to only about $1,253 per resident, the fourth lowest debt per capita among states and well below the $3,554 national average. Georgia is also one of only 15 states with a perfect triple A credit rating from Moody’s with a stable outlook from Moody’s.

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13. Nevada
> 2018 unemployment: 4.6% (8th highest)
> Pension funded ratio: 74.4% (24th highest)
> 1 yr. GDP growth: 4.2% (3rd highest)
> Poverty rate: 12.9% (24th highest)
> Moody’s credit rating and outlook: Aa1/Stable

Nevada has one of the fastest growing populations in the country. Due largely to an influx of new residents from out of state, Nevada’s population grew by 2.1% in the last year, more than triple the 0.6% national population growth over the same period. The population growth is likely helping fuel economic expansion, as Nevada’s 4.2% GDP growth in 2018 was nearly the highest among states and well above the comparable 2.9% national GDP growth.

Nevada does not rely as much on credit to fund its obligations. The state’s outstanding debt is equal to only about $1,093 per resident, the third lowest debt per capita among states and well below the $3,554 national average.

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14. California
> 2018 unemployment: 4.2% (14th highest)
> Pension funded ratio: 68.9% (24th lowest)
> 1 yr. GDP growth: 4.3% (2nd highest)
> Poverty rate: 12.8% (25th highest)
> Moody’s credit rating and outlook: Aa2/Stable

California has the equivalent of 17.5% of its annual expenditures saved in a rainy day fund, a larger share than all but three other states and more than double the 8.3% average across all states. California also has one of the fastest growing economies in the United States. Between 2017 and 2018, California’s GDP grew by 4.3%, the second largest economic expansion among states, trailing only Washington state. Over the same period, the U.S. economy grew by 2.9%.

Despite the rapid GDP growth, California’s 4.2% jobless rate is slightly higher than the 3.9% national average. Still, by some measures, California is able to aid more of its unemployed residents. Of the more than 741,000 unemployed state residents, 45.6% receive UI benefits, well above the 27.4% national average.

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15. Tennessee
> 2018 unemployment: 3.5% (21st lowest)
> Pension funded ratio: 96.5% (3rd highest)
> 1 yr. GDP growth: 3.1% (12th highest)
> Poverty rate: 15.3% (10th highest)
> Moody’s credit rating and outlook: Aaa/Stable

Over the last year, Tennessee’s economy expanded by 3.1%, slightly faster than the comparable 2.9% national GDP growth. Economic growth can be closely tied to the health of the job market, and in Tennessee, just 3.5% of the labor force was unemployed in 2018, compared to the 3.9% share of workers nationwide.

Most states have funding for less than 75% of their pension obligations, and many are facing a pension crisis. Tennessee, meanwhile, has funding for 96.5% of its pension obligations, the third highest share among states, trailing only South Dakota and Wisconsin. Fiscally well managed, Tennessee is one of only 15 states with a perfect triple A rating and a stable outlook from Moody’s.

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