Atlas State of the States’ Financials - 2017

 

 
Chicago IL, December 18, 2018
 
Muni Atlas Research, Inc. ("Atlas") today released its financial statements review on all 50 US states and Washington for the fiscal year 2017.
 
Most US states have their fiscal year end date in June. However, five states (see below) use different year-end dates. For comparison purposes, we have selected the financial statements ending within the same year.
March: New York
August: Texas
September: Alabama, Michigan and Washington, DC
 
Financial statement data are collected from state governments’ official Comprehensive Annual Financial Report (CAFR). Demographic data are collected through US Census Bureau as of December, 2017. As of the time of this research report, Puerto Rico has not reported either 2016 or 2017 financial statements yet, so Atlas does not include Puerto Rico in this report.
 
Atlas looked at 3 key statistics:(1) financial leverage, (2) expense/ revenue ratio, and (3) Long term state debt per household.
 
There is not much change in financial leverage compared to year 2016. New Jersey (279.87%), Illinois (268.86%), and Massachusetts (247.26%) still sit at the top. All of them have about 2.5 times the amount of liabilities versus assets or more. They are followed by Connecticut (193.64%), Kentucky (139.02%), California (107.90%), Maryland (104.94%), and Rhode Island (101.77%).
 
In terms of government total expenses versus total revenues, New Jersey (119.02%) spent almost 20% more than it can make. It got worse than the same benchmark in 2016(112.13%). Similar to the last year, Illinois sits at the second with 114.13% expense/revenue ratio. Three other states spent more than 5% of what they made: Delaware (107.58%), Massachusetts (107.51%), and Colorado (107.34%). It is notable that Alaska had swung from the highest expense/revenue ratio last year to the lowest of all the states this year. It benefits from the stabilized energy price as well as more controlled in spending. See the chart below for the State of Alaska since 2010:
 
 
Atlas also looked at the long-term debt picture of all state governments expressed in terms of the amount per household. We have almost the same top 10 states from this statistics. New Jersey leads all other states at $62,212 state debt per household, followed by Connecticut ($54,497), Hawaii (46,421), and DC ($40,691). There are seven other states have per-household state debt over $20,000. These include Illinois ($38,573), Massachusetts ($33,068), Kentucky ($29,691), Alaska ($27,798), Delaware ($24,194), Washington ($24,194), and Maryland ($20,956)
 
The State of New Jersey also tops the state debt payback measurement at 9.8 months. It would take each household in New Jersey about 9.8 months, without spending a penny elsewhere, to help the state government pay back its long-term debt. The same benchmark was 8.8 for New Jersey last year. It is followed by Connecticut (8.9 months), Kentucky (7.7 months), Illinois (7.6), Hawaii (7.4), and Washington DC (6.3 months).
 
 
New Jersey is on top of all four key benchmarks (Financial Leverage, Expense/Revenue Ratio, Log-term State Debt per Household, and Debt Payback in Month) in our research. Furthermore, those benchmarks in 2017 are getting worse compared to those of 2016. It is also notable that the State of Illinois also sits in top 5 of all four benchmarks.
 
About Atlas: As part of our complete Municipal data offering, Atlas collects financial statements for thousands of local governments, with unique insights and including over 10 years of history. This report only includes a few metrics. To request the full report, or for other Muni data needs, please contact us.
Atlas: Muni Investment Research Specialist