Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

Analysis of 2022 Audited Financial Reports Shows Wide Variance in State Fiscal Health

by April 11, 2024
April 11, 2024
Analysis of 2022 Audited Financial Reports Shows Wide Variance in State Fiscal Health

Marc Joffe

With California’s very late publication last month, all fifty states have now produced audited financial reports for their 2022 fiscal year. The availability of these reports allows us to compare the balance sheet health of all state governments on an apples‐​to‐​apples basis because they all use the same accounting standard.

Former California State Senator John Moorlach, a certified public accountant, has implemented a simple but powerful approach to analyzing state (and local) government finances. He takes the Unrestricted Net Position (UNP) for each state government and divides it by the state’s population.

UNP is a concept requiring some explanation. Net position is synonymous with net worth and is simply the difference between an organization’s assets (e.g., cash, receivables, buildings) and liabilities (e.g., payables, bonds outstanding). These remaining balances may be tied up in illiquid assets, making them not readily available. Any residual assets that are not spoken for make up the government’s “unrestricted net position”.

UNP is a balance sheet concept and is not typically found in state budgets. The measure indicates how fiscally responsible a state government has been over many recent years, not just the current year.

Moorlach’s analysis only covers a state’s “governmental activities”. He excludes “business type activities” like public utilities because they vary so much across governments. Focusing only on core governmental functions allows for more of an “apples to apples” comparison.

The accompanying map shows per capita unrestricted net position by state for fiscal year 2022. States colored in shades of red on the map have a negative unrestricted net position, indicative of poor financial health. In most cases, states that are in the red financially turn out to be blue politically: the six states with the most negative unrestricted net positions have Democratic legislatures. Deep blue New York and California are also in the red financially.

But Republican governance is no guarantee of fiscal probity. Texas has a UNP per capita of -$2,590 despite the lack of Democrats controlling policy at the state level. This deficit is fully accounted for by Texas’s large liabilities for underfunded public employee retirement benefits, including pensions and retiree healthcare. Other states that are both red financially and politically include Missouri and South Carolina. By contrast, Florida is above water, albeit slightly.

The financially strongest states, Alaska, North Dakota, and Wyoming benefit from having “permanent funds” based on natural resource endowments in each of these states.

0
FacebookTwitterGoogle +Pinterest
previous post
2023 Q4 Earnings Analysis and Projections Through 2024 Q4
next post
Guide to safe and ethical use of facial recognition tools launched

You may also like

Decentralization Defined: House Crypto Discussion Draft Offers a Glimmer...

June 9, 2023

Biden Didn’t Cause the Border Crisis, Part 3: Would...

January 16, 2025

DOGE Fell Short on Spending Cuts: Now Congress...

April 23, 2025

Call for Proposals: Junior Scholars Symposium 2024

March 22, 2024

A Jeffersonian Dinner on the Future of Social...

May 31, 2024

Moore v. Harper: Supreme Court Rejects Independent State...

June 27, 2023

My Thoughts on Letters in Black and White

May 25, 2023

Trump’s Automotive Tariffs Will Hurt American Consumers and...

March 29, 2025

Four GOP Presidential Candidates Say They’ll Close Education...

August 25, 2023

Friday Feature: Refine KC

October 6, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Rubio condemns assassination attempt on Colombian presidential candidate Miguel Uribe

      June 8, 2025
    • Obama WH physician says Biden doc should have performed cognitive test

      June 8, 2025
    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,570)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved