Beyond California: States in Fiscal Peril

Nov 11, 2009

California’s financial problems are in a league of their own. But the same pressures that drove the Golden State toward fiscal disaster are wreaking havoc in a number of states, with potentially damaging consequences for the entire country.

This examination by the Pew Center on the States looks closely at nine states, in addition to California, that are particularly affected by the recession. US_Map_330_2All of California’s neighbors–Arizona, Nevada and Oregon–and fellow Sun Belt state Florida were severely hit by the bursting housing bubble, landing them on Pew’s list of states facing fiscal difficulties similar to California’s. A Midwestern cluster of states comprising Illinois, Michigan and Wisconsin emerged, too, as did the Northeastern states of New Jersey and Rhode Island.

"Beyond California: States in Fiscal Peril" makes clear that the recession severely impacted states from different geographic regions with different types of economies, tax structures and political leanings. 

The Pew Center on the States hosted a briefing on November 13 with officials from California and Michigan following the release of "Beyond California: States in Fiscal Peril." 

Scoring the States

The Pew Center on the States compiled its list by scoring all 50 states according to six measurable factors that contributed to California’s ongoing fiscal woes, using the best available data as of July 31, 2009. The state profiles in this report go beyond the data to give a fuller picture of the recession’s deep and pervasive effects on states’ financial and economic well-being. 

Six Factors Revenue changeBudget gap  Unemployment rate change  Foreclosure rate  Need supermajority?       GPP "money" grade  Score
United States -11.70% 17.7%5 4.4 1.37% 17 yes, 33 no B- 17
California -16.20% 49.30% 4.6 2.02% Yes  D+ 30
Arizona -16.50% 41.10% 3 2.42% Yes  C+ 28
Rhode Island -12.50% 19.20% 4.5 1.50% Yes  D+ 28
Michigan -16.50% 12.00% 6 1.47% Yes  C+ 27
Oregon -19.00% 14.50% 6.4 0.86% Yes  C+ 26
Nevada 1.50% 37.80% 5.2 3.12% Yes  C+ 26
Florida -11.50% 22.80% 4.4 2.72% Yes  B- 25
New Jersey -15.80% 29.90% 3.7 1.18% No  C- 23
Illinois -10.90% 47.30% 3.5 1.44% No  C- 22
Wisconsin -11.20% 23.20% 4.4 0.96% No  C+ 22

Download the 50-state scorecard.  (Adobe PDF)

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