Study: CA Worst-Governed State in America

According to a new study from 24/7 Wall Street, California is the worst run state in the nation … for the second year in a row. The best run state is North Dakota. What went into the calculation? 24/7 Wall Street explains:

To determine how well the states are run, 24/7 Wall St. reviewed hundreds of data sets from dozens of sources. We looked at each state’s debt, revenue, expenditure and deficit to determine how well it is managed fiscally. We reviewed taxes, exports, and GDP growth, including a breakdown by sector, to identify how each state is managing its resources. We looked at poverty, income, unemployment, high school graduation, violent crime and foreclosure rates to measure if residents are prospering.

So what made California so terrible? Its budget situation is disastrous; all the best states have fiscally responsible budgets. Its credit rating is problematic; all the best states have a sterling credit rating. California has the lowest Standard & Poor’s credit rating of any state, at A-. California has an undereducated population compared to the rest of the country, and a skyrocketing unemployment rate. Compare North Dakota to California:

North Dakota. The state has a debt per capita of $3,282, which puts it somewhere in the middle of the pack. But it has no budget deficit, the lowest unemployment rate in the nation at 3.5%, a median household income of $51,704 (20^th), and only about 12.2% of its population below the poverty line, which ranks it 13^th. What made North Dakota’s economy boom? Its willingness to explore energy resources. Its oil boom has rocketed it to the top of the heap. And it’s no coincidence that its regional neighbors, Wyoming and Nebraska, clock in second and third.

California. Surprisingly, California’s debt per capita isn’t the highest in the nation, but that’s largely due to the fact that so many people live in California. Its per capita debt is $4,008, ranking it 18^th; it has a 20.7% budget deficit, ranking it 17^th; its median household income, while higher than North Dakota’s at $57,287, is outweighed by the fact that 16.6% of people in California live below the poverty line, and the cost of living is extreme in the state. California has one of the worst business tax climates in the country, and businesses are leaving in droves.

Worth noting: all of the top five states in terms of best-run in this study are Republican-governed. Four of the bottom five are governed by Democrats, Arizona being the only exception.