A recent study by the Mercatus Center at George Mason University shows that states that have lower taxes are the most fiscally sound in the nation, while higher-tax states are still failing to make up for budget shortfalls.
The study shows that the best-run states are Republican strongholds, while the ten “least-solvent” states are heavily Democratic.
The fourth annual “Ranking of the States by Fiscal Condition” report is based on “a review of audited financial statements for 2015 covering five measures that gauge the states’ ability to pay bills, avoid budget deficits, and meet long-term spending needs and cover pension liabilities.”
The Republican led state of Florida moved from sixth place to first, while Alaska dropped from first place last year to 17th this year. Idaho moved up in the rankings to the top 10.
The states of Louisiana and West Virginia both dropped into the 10-worst list, while Hawaii drastically improved, moving from 45th place last year 27th this year. Connecticut, Maine, and New York also moved out of the bottom 10 list. However, New Jersey fell to last place from last year’s 48th place.
The Mercatus report does not include partisan leanings, but the facts speak for themselves.
Of 25 best-run states, all but four of the states are GOP strongholds. Of the bottom 25 states, all but five are overwhelmingly Democratic.
According to the Tax Foundation’s 2017 report, the average tax burden among the 10 most fiscally sound states is 8.5%, while the average tax burden among the 10 least fiscally sound states is 10.2%.
Put simply, of the 15 “least-solvent” states, 10 of them are among the 15 states with the highest tax burdens.
Of the nine states that raised taxes in 2017, four of them are ranked in the bottom tier, and none of them are in the top 10.
The implications are clear: a state government cannot tax itself into prosperity.