Illinois is the worst-run state in America.
That’s the opinion of 24/7 Wall Street, which annually ranks all 50 states in three major categories: financial position, economic outcomes, and social outcomes.
Not surprisingly, the Illinois pension fiasco figured prominently in the results. With just 39.3% of pension liabilities funded as of 2013, Illinois ranked the lowest in that category. The state’s reserves are estimated at just 0.5 percent of the general fund expenditure, which is the second-lowest rate nationwide.
Credit ratings for Illinois by Moody's and S&P are the worst of any state, at A3 and A- respectively. Moody's reports that the state's rating reflects – in addition to the low fund balances and high pension obligations -- its "chronic use of payment deferrals to manage operating fund cash."
The study also found the state’s debt per capita is just under $5,000 for every resident in Illinois.
The 2013 unemployment rate was 9.2%, the third-highest in the nation.
Median household income, at $56,210 in 2013, was 17th highest; but the poverty rate of 14.7% fell at the 25th lowest in the country.
The survey also considered the share of each state’s population with at least a high school diploma and the violent crime rates. Also included are labor force growth over the previous five years and total net migration.
In that latter category, Illinois lost more than 137,000 residents due to migration between the middle of 2010 and July 2013. Median home values fell 16.2% between 2009 and 2013, the second largest drop nationwide.
North Dakota ranked first, and last year’s No. 50 – California – moved up to No. 30.
Just to our west, Iowa ended up in fourth place, with a low unemployment rate of 4.6% and top credit rankings from both Moody’s and S&P. The poverty rate of 12.7% is 11 spots above Illinois, but the median household income is $4,000 less than it is in Illinois. Debt per capita is just $1,995.
Wisconsin, our neighbor to the north, ranked 26th, with significantly better credit ratings and an unemployment rate of only 6.7%. Debt per capita was nearly $1,000 lower, and median household income was nearly $5,000 lower than in Illinois.
In the pension category, Wisconsin has funded 99.9% of its pension obligations, but the state’s Legislative Fiscal Bureau projects a nearly $1.8 billion shortfall heading into the 2015-2017 budget.
24/7 Wall St. is a Delaware-based financial news and opinion operation that produces content for sites including MarketWatch, DailyFinance, Yahoo! Finance, and TheStreet.com.
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