Florida's Fiscal Strength Ranked 5th Best Nationally

A recent study by George Mason University’s Mercatus Center reviewed the fiscal health of the United States, breaking down each state individually for comparison across several standardized metrics. The report outlines various aspects that impact each state’s fiscal health, including (Florida rank):

• Cash solvency (2nd): a measure of whether a state has enough cash to cover its short term bills;
• Budget solvency (5th): a measure of whether a state can cover its fiscal year spending out of current revenues;
• Long-run solvency (31st): a measure of whether a state has a hedge against large long term liabilities;
• Service-level solvency (4th): a measure of how high revenues, taxes, and spending are compared to a state’s personal income tax; and
• Trust fund solvency (11th): an overall measure of how much debt a state has.

After calculating the relative impacts of each measure on each state, the George Mason University study ranked Florida 5th in the nation in overall fiscal condition. This Economic Commentary takes a look into some of these measurements, as well as examining other areas that affect Florida’s fiscal standing.