Special Report

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

Source: zrfphoto / Getty Images

16. California
> 2019 unemployment: 4.0% (12th highest)
> Pension funded ratio: 71.1% (25th lowest)
> 1 yr. GDP growth: +3.4% (6th highest)
> Poverty rate: 11.8% (25th highest)
> Moody’s credit rating and outlook: Aa2/Stable

California reported near nation-leading economic growth in 2019, with GDP expanding by 3.4%, a greater growth than all but five other states and well above the 2.2% national GDP growth that year. California is also better positioned than most states to fund government operations in the event of a budget deficit, with $21.2 billion in a rainy day fund — enough to cover about 15% of annual government spending. Most states have less than 10% of their annual expenditures saved in a rainy day fund.

California does not rank better than most states in many other important measures, however. For example, even before the COVID-19 pandemic, the state’s annual unemployment rate was 4.0%, higher than most other states and the 3.7% national jobless rate.

Source: Ron and Patty Thomas / Getty Images

17. Tennessee
> 2019 unemployment: 3.4% (24th lowest)
> Pension funded ratio: 97.7% (3rd highest)
> 1 yr. GDP growth: +1.6% (24th lowest)
> Poverty rate: 13.9% (9th highest)
> Moody’s credit rating and outlook: Aaa/Stable

Tennessee faces greater social and public health challenges than most states. One of the most dangerous states in the country, Tennessee’s violent crime rate of 595 incidents per 100,000 people is higher than that of all but two other states and well above the national rate of 367 per 100,000. Additionally, life expectancy at birth in Tennessee is just 76 years, three years below the national average.

Still, Tennessee is one of the most fiscally well-managed states in the country. At a time when many states are facing a pension crisis, Tennessee has assets on hand to cover about 98% of its pension liabilities. Additionally, Tennessee is one of only 12 states with a perfect triple-A credit rating and a stable outlook from Moody’s.

Source: traveler1116 / Getty Images

18. Virginia
> 2019 unemployment: 2.8% (9th lowest)
> Pension funded ratio: 79.0% (20th highest)
> 1 yr. GDP growth: +2.2% (18th highest)
> Poverty rate: 9.9% (11th lowest)
> Moody’s credit rating and outlook: Aaa/Stable

Virginia is one of the safest states in the country. There were only 208 violent crimes reported in the state in 2019 for every 100,000 people, well below that year’s national violent crime rate of 367 per 100,000. Virginia residents are also more likely than most Americans to avoid poverty. The state is one of fewer than a dozen nationwide with a poverty rate below 10%.

While the Virginia population may be better positioned financially than Americans on average, the state government is not. Virginia has only $792 million saved in a rainy day fund — enough to cover only 3.7% of its annual expenditures. On average, state rainy day savings have funding to cover 8.7% of annual expenditures.

Source: Sean Pavone / Getty Images

19. Georgia
> 2019 unemployment: 3.4% (24th lowest)
> Pension funded ratio: 80.1% (18th highest)
> 1 yr. GDP growth: +1.6% (25th highest)
> Poverty rate: 13.3% (14th highest)
> Moody’s credit rating and outlook: Aaa/Stable

Before the COVID-19 pandemic, job growth was relatively strong in Georgia. Overall employment climbed by 8.3% in the state from 2015 to 2019, outpacing the comparable 6.4% national job growth rate. Partially as a result, Georgia’s 3.4% 2019 annual unemployment rate is below the 3.7% national jobless rate.

While job growth has been strong, overall economic growth in Georgia has been less robust. Last year, Georgia’s economy expanded by just 1.6% — trailing the national 2019 GDP growth of 2.2%.

Source: Eifel Kreutz / Getty Images

20. North Carolina
> 2019 unemployment: 3.9% (15th highest)
> Pension funded ratio: 88.6% (8th highest)
> 1 yr. GDP growth: +1.9% (21st highest)
> Poverty rate: 13.6% (11th highest)
> Moody’s credit rating and outlook: Aaa/Stable

By several measures, North Carolina is better fiscally managed than most other states. Not only is it one of only 12 states with a perfect triple-A credit rating and a stable outlook from Moody’s, but it also has a well-funded pension system at a time when many states are confronting a pension crisis. North Carolina has about $97.6 billion in assets for employee pensions, enough to cover 88.6% of its obligations. On average, states have assets to cover only about 71% of pension obligations.

In some other key economic measures, North Carolina is lagging much of the rest of the country. For example, North Carolina residents are more likely to live below the poverty line and more likely to be unemployed than most Americans. More robust economic growth would likely help reduce the state’s high poverty and unemployment rates. North Carolina’s GDP expanded by just 1.9% in 2019, slower than in most states and below the 2.2% national economic growth rate.