Tennessee state capitolNASHVILLE -- A free-market think tank ranks Tennessee in the top ten among the 50 states when it comes to "fiscal health."
The Mercatus Center at George Mason University in its new study places Tennessee as No. 8. 8th in the nation for its financial health. Alabama was No. 13 while Georgia was 26th.
Mercatus' senior research fellow Eileen Norcross ranked states' financial health based on short- and long-term debt and other "key fiscal obligations," such as unfunded state worker pensions and health care benefits.
Alaska, flush with oil tax revenues, was No. 1. Illinois's fiscal health was ranked worst at No. 50.
Tennessee ranked No. 10 in terms of "cash solvency," which seeks to measure whether a state has enough cash to cover its short-term bills. It was 25th in terms of "budget solvency," which measures whether a state can cover its fiscal year spending out of current revenues.
It earned the No. 10 slot on service-level solvency, which measures how high taxes, revenues, and spending are when compared to state personal income.
The state's strongest showings were in trust-fund solvency and and long-term solvency, pulling down the No. 4 spot in each category.
Trust fund solvency looks how much debt a state has in areas such as unfunded pension liabilities and other postemployment benefits as well as state debt compared to state residents' personal income. Tennessee has long had one of the nation's best-funded state worker pensions.
Tennessee state government's debt ratio is 1.1 versus the national average of 4.0.
Long-run solvency measures if a state has an adequate hedge against large, long-term liabilities to cushion the state from potential shocks or long-term fiscal risks.
To read more of the report, go to: http://mercatus.org/statefiscalrankings