The election last November of Maryland Governor Larry Hogan
was a welcome sign that Marylanders recognized that the state’s fiscal health
was poor – the result of too much unrestrained spending leading to too much
debt. The election confirmed that Maryland’s citizens wanted a change of
direction.
Since he took office, Governor Hogan already has taken some
positive steps to improve Maryland’s budgetary situation – and he needs the
help of the legislature to do more.
If a further spur were needed, now comes the newly-released
study from George Mason University’s Mercatus Center titled, “Ranking the States by Fiscal
Condition.” The study is authored by Eileen Norcross, the respected analyst
who directs the Mercatus Centers State and Local Policy Project.
The new study ranks each U.S.
state’s financial health based on short and long-term debt and other key fiscal
obligations, including unfunded pensions and health care benefits. It builds on
previous Mercatus research concerning each state’s fiscal condition. And it provides
information from the states’ audited financial reports in an easily accessible
format, presenting an accurate snapshot of each state’s fiscal health.
Sadly, Maryland ranks 37th
among the 50 states for its fiscal health, based on its fiscal solvency in five
separate categories. I urge you to look at the Maryland results set forth in more depth in the report. But here are the
summary results for the five categories used to rank all the states:
- Maryland ranks 39th in terms of cash solvency
- Maryland ranks 44th in terms of budget solvency
- Maryland ranks 43rd in terms of long-run solvency
- Maryland ranks 11th in terms of service-level solvency
- Maryland ranks 17th in terms of trust fund solvency
Again, all told, Maryland’s
overall ranking is 37th among the 50 states. (Perhaps not
surprisingly, Illinois brings up the rear!)
Make no mistake whatever:
Maryland is not Greece! But the new study does indicate that there is work to
be done to improve Maryland’s fiscal health. Governor Hogan, rightfully in my
view, has vowed to hold the line against imposing new taxes, since Maryland
already suffers from a reputation as a state with excessively high taxes. So it
will be important, going forward, to restrain the rapid growth experienced in the
last many years in the level of expenditures.
For the sake of future
Marylanders, as a measure of its fiscal health, the state needs to do better
than rank 37th!