Study: Older States Tend to Have Worse Finances

A report suggests that the older a state is, the more likely it is that special interests have entrenched themselves, negatively impacting the public purse.
October 13, 2018, 5am PDT | Philip Rojc | @PhilipRojc
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Marcio Jose Bastos Silva

William Bergman, director of research for Truth in Accounting, has found that older states are more prone to financial problems. Drawing from one of his organization's reports, Bergman points to factors like gerrymandering and the proliferation of lawyers as signs that special interest groups have particular sway in a state.

Illinois, Louisiana, Maryland, Massachusetts, New Jersey, and Pennsylvania are some of the states that fit the bill, writes Liz Farmer for Governing. "These states, says Bergman, have allowed special interests groups to run up debt in the form of unfunded pension and retiree health-care benefits. These debts, in turn, are hurting economic growth."

Bergman wants states with relatively low levels of debt to take note. "In other words, younger states like Idaho and Utah, both admitted to the Union in the 1890s, aren't necessarily doomed to face the same fate. As it stands, they both have a taxpayer surplus and relatively low levels of political machinery by traditional economic measures," Farmer writes.

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Published on Wednesday, October 3, 2018 in Governing
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