Special Report

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

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1. Utah
> 2019 unemployment: 2.6% (4th lowest)
> Pension funded ratio: 85.2% (9th highest)
> 1 yr. GDP growth: +3.8% (4th highest)
> Poverty rate: 8.9% (2nd lowest)
> Moody’s credit rating and outlook: Aaa/Stable

For the second year in a row, Utah ranks as the best run state in the country. The state is one of only 12 nationwide with a perfect triple-A rating and stable outlook from credit rating agency Moody’s. It also has the funding to meet over 85% of its pension obligations, well above the 70.7% average among all states.

Not only is the state government in a strong financial position, but many of the state’s residents are as well. Utah’s 8.9% poverty rate is nearly the lowest in the country, and the median household income in the state of $75,780 is higher than in all but 10 other states. Widespread financial stability is partially the product of a strong job market. Utah’s annual unemployment rate of 2.6% is lower than that of all by three other states and well below the 3.7% national rate.

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2. Washington
> 2019 unemployment: 4.3% (8th highest)
> Pension funded ratio: 93.9% (5th highest)
> 1 yr. GDP growth: +4.6% (2nd highest)
> Poverty rate: 9.8% (9th lowest)
> Moody’s credit rating and outlook: Aaa/Stable

Washington’s economy is growing faster than that of nearly every other state. At 4.6%, GDP growth in Washington in 2019 was more than double the 2.2% national economic growth the same year. Washington is one of only half a dozen states to report employment growth above 10% from 2015 to 2019.

Policy makers in Washington have positioned the state well to meet its financial obligations. About 94% of the state’s public employee pension system is funded — well above the 70.7% average funding across all states. Additionally, Washington is one of only 12 states with a perfect triple-A credit rating and a stable outlook from Moody’s.

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3. Idaho
> 2019 unemployment: 2.9% (11th lowest)
> Pension funded ratio: 92.4% (6th highest)
> 1 yr. GDP growth: +3.4% (5th highest)
> Poverty rate: 11.2% (21st lowest)
> Moody’s credit rating and outlook: Aa1/Stable

Idaho is one of fewer than a dozen states with an annual unemployment rate below 3%. Violent crime is also fairly uncommon in Idaho, as there were only 224 reported incidents for every 100,000 people in 2019, well below the national violent crime rate of 367 per 100,000.

A relatively safe state with a healthy job market, Idaho drew in tens of thousands of new residents in 2019. The state’s population grew 2.1% last year — more than every other state and over four times the 0.5% U.S. population growth rate. Population growth can contribute to economic growth, and Idaho’s economy is among the fastest growing in the country. The state’s GDP expanded by 3.4% in 2019, compared to 2.2% U.S. GDP growth.

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4. Minnesota
> 2019 unemployment: 3.2% (17th lowest)
> Pension funded ratio: 81.8% (15th highest)
> 1 yr. GDP growth: +1.1% (15th lowest)
> Poverty rate: 9.0% (4th lowest)
> Moody’s credit rating and outlook: Aa1/Stable

Minnesota ranks as the best-run state in the Midwest and fourth best nationwide. In 2019, before the pandemic sent the unemployment rate soaring nationwide, only 3.2% of the labor force in Minnesota was out of work, one of the lower unemployment rates among states. A strong job market reduces the likelihood of serious financial hardship for state residents, and Minnesota is one of fewer than a dozen states with a poverty rate below 10%.

Many states are facing a budget shortfall and do not have the revenue or savings necessary to cover public employee pensions. Minnesota is better positioned than most, however, with funding for over 80% of its pension obligations. Minnesota has ranked among the top five best run states every year since 2014.

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5. Colorado
> 2019 unemployment: 2.8% (9th lowest)
> Pension funded ratio: 58.8% (9th lowest)
> 1 yr. GDP growth: +3.9% (3rd highest)
> Poverty rate: 9.3% (7th lowest)
> Moody’s credit rating and outlook: Aa2/Stable

Colorado was among the 10 fastest growing states, by population, last year. And like most states people are flocking to, Colorado’s economy is growing rapidly. The state reported near nation-leading 3.9% GDP growth in 2019. For context, the U.S. economy grew by 2.2% the same year.

A strong job market may partially explain Colorado’s rapid population and economic growth. From 2015 to 2019, employment in Colorado climbed by 9.6%, more than in all but six other states. In 2019, before the COVID-19 recession, just 2.8% of the labor force in Colorado was unemployed, well below the 3.7% national annual unemployment rate.

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