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Study Ranks South Dakota 5th In Fiscal Health

http://mercatus.org/statefiscalrankings/southdakota

A recent study shows South Dakota is in control of its finances. South Dakota was ranked fifth in the nation for fiscal health.

George Mason University released their annual fiscal health rankings this week. The study analyzes all 50 states and Puerto Rico based on five financial categories. They include a balanced budget, cash reserves, and ­­­–state debt. Researchers say South Dakota ranked high on the list both for having available assets on hand and for being prepared for future problems. Eileen Norcross is a senior research fellow at George Mason University. She says not all states are lucky enough to have a well-structured system.

“The states at the bottom include Connecticut, Massachusetts, New Jersey, Illinois and Kentucky. These are states that have had long running problems especially in the area of unfunded pension liabilities. And they’ve had structural deficient over the past several years; they’ve had a hard time achieving a budget balanced. They have a history of using debt to cover short falls and these sorts of underlying structural drivers,” says Norcross.

Norcross says states such as Alaska, Nebraska and North Dakota all placed above South Dakota on the rankings list. However . . . Norcross says these states may be heading toward economic troubles in the coming years.

“Definitely at the top Alaska and North Dakota are two states that are heavily reliant on oil revenue. Alaska though its number one, we’re looking at 2014 data. They’ve been experiencing budget stress for at least a year or two now. One way that comes out in the figures is that their spending is high relative to the wealth of the residents of those states. And that’s an indicator that they might be living beyond their means based on that kind of windfall money,” says Norcross.

Norcross says South Dakota’s revenue exceeds expenses. She says South Dakota ranked third in fiscal health on last year’s list.