Special Report

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

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26. South Carolina
> 2019 unemployment: 2.8% (9th lowest)
> Pension funded ratio: 55.1% (7th lowest)
> 1 yr. GDP growth: +2.8% (10th highest)
> Poverty rate: 13.8% (10th highest)
> Moody’s credit rating and outlook: Aaa/Stable

Before the COVID-19 pandemic, South Carolina had one of the lowest unemployment rates in the country. An average of just 2.8% of the labor force in the state was unemployed last year, compared to the 3.7% national unemployment rate.

While jobs appear widely available in the state, they are generally not very well paying. The typical South Carolina household earns just $56,227 a year, about $9,500 less than the median household income nationwide. South Carolina’s poverty rate of 13.8% is also higher than the 12.3% national poverty rate. Despite high poverty, South Carolina allocates just 40% of its annual spending to social services and income maintenance, less than the 43% average across all states.

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27. Vermont
> 2019 unemployment: 2.4% (2nd lowest)
> Pension funded ratio: 64.2% (14th lowest)
> 1 yr. GDP growth: +0.8% (9th lowest)
> Poverty rate: 10.2% (15th lowest)
> Moody’s credit rating and outlook: Aa1/Stable

An estimated 5.7% of Vermont’s annual spending goes towards public safety, a larger share than all but three other states. The state also has one of the lowest violent crime rates in the country. There were just 202 violent crimes for every 100,000 people in Vermont in 2019, compared to the national violent crime rate of 367 per 100,000. Vermonters also benefit from one of the strongest job markets in the country, as just 2.4% of the labor force was unemployed in 2019, compared to the 3.7% national unemployment rate.

Safe streets and job opportunities have not been enough to draw in new residents, however, and Vermont is one of only 10 states to report population decline in 2019. Fewer residents translate to reduced demand for housing, and that may be having an effect on real estate values in the state. The typical home in Vermont appreciated by just 0.04% in 2019, while the typical home nationwide was worth 4.7% more in 2019 than in the previous year.

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28. Montana
> 2019 unemployment: 3.5% (24th highest)
> Pension funded ratio: 72.6% (24th highest)
> 1 yr. GDP growth: +2.8% (11th highest)
> Poverty rate: 12.6% (20th highest)
> Moody’s credit rating and outlook: Aa1/Stable

Economic growth in Montana has been relatively strong as the state reported 2.8% GDP growth in 2019, outpacing the 2.2% national GDP growth rate that year. The state’s job market is also healthier than most, as the 2019 unemployment rate in Montana was just 3.5% — slightly below the 3.7% national jobless rate.

In other key measures, Montana lags behind much of the rest of the country. For example, the state has only about $60 million saved in a rainy day fund — enough to cover just 2.5% of its annual expenditures. Meanwhile, across all states, the average rainy day fund can cover about 9% of annual budget expenses.

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29. New York
> 2019 unemployment: 4.0% (12th highest)
> Pension funded ratio: 98.0% (2nd highest)
> 1 yr. GDP growth: +1.6% (25th lowest)
> Poverty rate: 13.0% (16th highest)
> Moody’s credit rating and outlook: Aa2/Stable

New York is one of the healthiest states in the country, with a life expectancy at birth of 81.3 years — the third highest of any state. The state also has the highest real GDP per capita of any state, at more than $76,600. Nationwide, real GDP per capita is $58,164.

New York’s fiscal management measures are a mixed bag. New York’s credit rating of Aa2 with a stable outlook from Moody’s is lower than 27 other states. Similarly, the state’s rainy day fund is small, able to cover only 2.8% of its general expenditures — one of the lowest shares of any state and well below the average across all states of 8.7%. On the other hand, New York has enough assets to cover 98% of its pension obligations, the second highest pension funded ratio of any state.

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30. Arizona
> 2019 unemployment: 4.7% (6th highest)
> Pension funded ratio: 65.5% (17th lowest)
> 1 yr. GDP growth: +3.1% (7th highest)
> Poverty rate: 13.5% (13th highest)
> Moody’s credit rating and outlook: Aa2/Stable

Arizona’s economy grew by 3.1% in 2019 — faster than all but six other states and far outpacing the 2.2% national GDP growth the same year.

The rapid economic growth has not, however, translated to a strong job market or a low poverty rate in Arizona. Even before the COVID-19 pandemic and resulting recession, the annual unemployment rate in Arizona was 4.7%, a full percentage point higher than the comparable national rate. Additionally, an estimated 13.5% of Arizona’s population lives below the poverty line, compared to 12.3% of Americans nationwide.

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