Report Ranks Rhode Island 2nd Worst-Run State
Wednesday, November 28, 2012
The 38 Studios debacle, pension woes and a high unemployment rate makes Rhode Island the second worst-run state in the country, according to a ranking released by the website 247wallst.com.
“Rhode Island’s finances were a mess in fiscal 2010. The state had $9.5 billion in unpaid debts, which came to 107.2% of that year’s revenues,” the website states. “At more than $9,000 per person, it’s one of the largest debt burdens in the country. The state also funded less than half of its pension obligations, worse than all states except for Illinois. In 2010, in a spectacular example of fiscal mismanagement, the state guaranteed a $75 million loan to a video game company, which has since defaulted. With one of the nation’s slowest growth rates and the third-highest unemployment rate in the U.S., at 11.3%, Rhode Island’s economy performed poorly overall.”
The ranking is based on statistics from the 2010 fiscal year, which was before the state passed its landmark pension reform overhaul. Unemployment has also dipped to 10.4%, but is now second-highest in the country.
Contributing to ranking was the state having both the third-highest unemployment rate (11.3%) and debt per capita ($9,018) during fiscal year 2012. Rhode Island also had the 28th largest budget deficit, 17th highest median household income, and 24th lowest percentage of residents below the poverty line.
Only California ranked worse than the Ocean State. Of the other New England states, Vermont ranked No. 8, Mass; New Hampshire finished No. 14; Maine ranked No. 36; and Connecticut finished No. 36.
The top five included North Dakota, Wyoming, Nebraska, Utah and Iowa.
“For the first time, North Dakota ranks as the best run state in the country,” the website states. “In recent years, North Dakota’s oil boom has transformed its economy. Last year, crude oil production rose 35%. As of August, 2012, it was the second-largest oil producer in the country. This was due to the use of hydraulic fracturing in the state’s Bakken shale formation. The oil and gas boom brought jobs to North Dakota, which had the nation’s lowest unemployment rate in 2011 at 3.5%, and economic growth. Between 2010 and 2011, North Dakota’s GDP jumped 7.6%, by far the largest increase in the nation. This growth has also increased home values, which rose a nation-leading 29% between 2006 and 2011. North Dakota and Montana are the only two states that have not reported a budget shortfall since fiscal 2009.”