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Finance Search HOME INVESTING NEWS PERSONAL FINANCE MY PORTFOLIOS EXCLUSIVES CNBC Career & Education Insurance Lifestyle Loans Real Estate Retirement Saving & Spending Taxes Focus on Retirement Glossary Search for share prices Finance Search Tue, Nov 27, 2012, 5:21 PM EST - U.S. Markets closed The Best- and Worst-Run States in America 24/7 Wall StBy Michael B. Sauter, Alexander E. M. Hess, Samuel Weigley and Ashle y C. Allen | 24/7 Wall St 7 hours ago Thinkstock Yahoo! Finance/Thinkstock - Thinkstock How well run are Americas 50 states? The answer depends a lot on where you live. Every year, 24/7 Wall St. conducts an extensive survey of all fifty states in Am erica. Based on a review of data on financial health, standard of living and gov ernment services by state we determine how well each state is managed. For the f irst time, North Dakota is the best run. California is the worst run for the sec ond year in a row. The successful management of a state is difficult to measure. Factors that affec t its finances and population may be the result of decisions made years ago. A s tates difficulties can be caused by poor governance or by external factors, such as extreme weather. [More from 24/7 Wall St.: Americas Poorest States]

A state with abundant natural resources should have an easier time balancing its budget than one starved for resources. Regional problems or the national declin e of certain industries can destroy local economies. The subprime mortgage crisi s, for example, disproportionately affected states with strong construction and real estate markets. Such factors can be easily identified and noted as possible causes for a states poverty levels, unemployment, or strained coffers. Despite this, it is the responsibility of each state to deal with the resources at its disposal. Each government must anticipate economic shifts and diversify i ts industries and attract new business. A state should be able to raise enough r evenue to ensure the safety of its citizens and minimize hardship without spendi ng more than it can prudently afford. Some states have historically done this mu ch better than others. To determine how well the states are run, 24/7 Wall St. reviewed hundreds of dat a sets from dozens of sources. We looked at each states debt, revenue, expenditur e and deficit to determine how well it is managed fiscally. We reviewed taxes, e xports, and GDP growth, including a breakdown by sector, to identify how each st ate is managing its resources. We looked at poverty, income, unemployment, high school graduation, violent crime and foreclosure rates to measure if residents a re prospering. The best-run states have certain characteristics in common, as do the worst run. The high-ranking states all have well-managed budgets. Each of the top ten has a perfect, or near-perfect, credit rating from Standard & Poors, Moodys, or both. Of the ten worst-ranked, only three received top scores from one agency, and non e from both. California is currently the only state rated A- by S&P, the lowest score given to any state. These poor-ranked states have high debt relative to bo th income and expenditure. There is a strong correlation between well-educated populations and generally we ll-managed states. Of the ten best-scoring states on our list, nine have among t he highest percentages of adults with high school diplomas. [More from 24/7 Wall St.: The 12 Companies Paying Americans the Least] Employment is also closely correlated to how well a state is managed. The unempl oyment rates of most of the poorly ranked states are among the highest in the co untry. Nine of the ten best-ranked states had an unemployment rate of less than 7% in 2011. This includes North Dakota, which had the lowest rate in the country in 2011, at just 3.6%. The average unemployment rate nationwide was 8.9% in 201 1. Best-Run States: 1. North Dakota Thinkstock> Debt per capita: $3,282 (22nd lowest) > Budget deficit: None > Unemployment: 3.5% (the lowest) > Median household income: $51,704 (20th highest) > Pct. below poverty line: 12.2% (13th lowest) For the first time, North Dakota ranks as the best run state in the country. In recent years, North Dakotas oil boom has transformed its economy. Last year, crud e oil production rose 35%. As of August, 2012, it was the second-largest oil pro ducer in the country. This was due to the use of hydraulic fracturing in the sta tes Bakken shale formation. The oil and gas boom brought jobs to North Dakota, wh ich had the nations lowest unemployment rate in 2011 at 3.5%, and economic growth

. Between 2010 and 2011, North Dakotas GDP jumped 7.6%, by far the largest increa se in the nation. This growth has also increased home values, which rose a natio n-leading 29% between 2006 and 2011. North Dakota and Montana are the only two s tates that have not reported a budget shortfall since fiscal 2009. 2. Wyoming Thinkstock> Debt per capita: $2,694 (18th lowest) > Budget deficit: 10.3% (32nd largest) > Unemployment: 6.0% (7th lowest) > Median household income: $56,322 (13th highest) > Pct. below poverty line: 11.3% (6th lowest) Wyoming is not the best-run state in the nation this year. The drop is largely d ue to the states contracting economy. In 2011, GDP shrunk by 1.2%, more than any other state. As a whole, however, the state is a model of good management and a prospering population. The state is particularly efficient at managing its debt, owing the equivalent of just 20.4% of annual revenue in fiscal 2010. Wyoming al so has a tax structure that, according to the Tax Foundation, is the nations most -favorable for businesses it does not have any corporate income taxes. The state has experienced an energy boom in recent years. The mining industry, which incl udes oil and gas extracting, accounted for 29.4% of the states GDP in 2011 alone, more than in any other state. As of last year, Wyomings poverty, home foreclosur e, and unemployment rates were all among the lowest in the nation. 3. Nebraska Thinkstock> Debt per capita: $1,279 (2nd lowest) > Budget deficit: 9.7% (34th largest) > Unemployment: 4.4% (2nd lowest) > Median household income: $50,296 (22nd highest) > Pct. below poverty line: 13.1% (tied-15th lowest) Last year, Nebraska had the second-lowest unemployment rate in the nation at 4.4 %. In Lincoln, the state capital, the unemployment rate was 4%, lower than all m etropolitan areas in the country, except Bismarck and Fargo in North Dakota. Alt hough far from the nations wealthiest state median income was slightly lower than the U.S. median of $50,502 Nebraskas economy is strong relative to the rest of t he U.S. The state is one of the leading agricultural producers, with the sector accounting for 8.3% of the states GDP last year. The state also had the second-lo west debt per capita in the country in fiscal 2010, at $1,279, compared to an av erage of $3,614 for states nationwide. 4. Utah Thinkstock> Debt per capita: $2,356 (15th lowest) > Budget deficit: 14.7% (25th largest) > Unemployment: 6.7% (tied-11th lowest) > Median household income: $55,869 (14th highest) > Pct. below poverty line: 13.5% (tied-17th lowest) In fiscal 2011, Utah had a budget deficit of $700 million, equal to 14.7% of the states GDP. This debt-to-GDP ratio is worse than half the states in the U.S. Des pite these problems, Utah has committed to reducing expenses in place of raising taxes or increasing debt. The state has also limited its borrowing. Its total d ebt was just under $6.5 billion in fiscal 2010, or $2,356 per capita less than m ost states and 40.4% of 2010 tax revenue. Both Moodys and S&P gave Utah their hig hest credit ratings because of the states strong fiscal management. Moodys comment ed that Utah has a tradition of conservative fiscal management; rebuilding of bud getary reserves after their use in the recession; [and] a closely managed debt p

ortfolio. 5. Iowa Thinkstock> Debt per capita: $1,690 (7th lowest) > Budget deficit: 20.3% (18th largest) > Unemployment: 5.9% (6th lowest) > Median household income: $49,427 (24th highest) > Pct. below poverty line: 12.8% (14th lowest) Like many of the other well-run states, Iowa is one of the nations top agricultur al centers the industry accounted for 6.6% of the states GDP in 2011. The farm ec onomy has contributed significantly to growth, with farm earnings rising rapidly and land values skyrocketing. State GDP rose by 1.9% between 2010 and 2011 the 12th-highest increase in the country. Iowas unemployment rate fell from 6.3% in 2 010 to just 5.9% in 2011, the nations sixth-lowest rate. The state has carried a low debt burden in recent years, averaging just $1,690 per capita in fiscal 2010 , among the nations lowest. The state currently has the best possible credit rati ngs both from Moodys and S&P. Worst-Run States: 50. California Thinkstock> Debt per capita: $4,008 (18th highest) > Budget deficit: 20.7% (17th largest) > Unemployment: 11.7% (2nd highest) > Median household income: $57,287 (10th highest) > Pct. below poverty line: 16.6% (18th highest) California is 24/7 Wall St.s Worst Run State for the second year in a row. Due to h igh levels of debt, the states S&P credit rating is the worst of all states, whil e its Moodys credit rating is the second-worst. Much of Californias fiscal woes in volve the economic downturn. Home prices plunged by 33.6% between 2006 and 2011, worse than all states except for three. The states foreclosure rate and unemploy ment rate were the third- and second-highest in the country, respectively. But e fforts to get finances on track are moving forward. State voters passed a ballot initiative to raise sales taxes as well as income taxes for people who make at least $250,000 a year. While median income is the 10th-highest in the country, t he state also has one of the highest tax burdens on income. According to the Tax Foundation, the state also has the third-worst business tax climate in the coun try. 49. Rhode Island Thinkstock> Debt per capita: $9,018 (3rd highest) > Budget deficit: 13.4% (28th largest) > Unemployment: 11.3% (3rd highest) > Median household income: $53,636 (17th highest) > Pct. below poverty line: 14.7% (24th lowest) Rhode Islands finances were a mess in fiscal 2010. The state had $9.5 billion in unpaid debts, which came to 107.2% of that years revenues.At more than $9,000 per person, its one of the largest debt burdens in the country. The state also funde d less than half of its pension obligations, worse than all states except for Il linois. In 2010, in a spectacular example of fiscal mismanagement, the state gua ranteed a $75 million loan to a video game company, which has since defaulted. W ith one of the nations slowest growth rates and the third-highest unemployment ra te in the U.S., at 11.3%, Rhode Islands economy performed poorly overall.

48. Illinois Thinkstock> Debt per capita: $4,790 (11th highest) > Budget deficit: 40.2% (2nd largest) > Unemployment: 9.8% (tied-10th highest) > Median household income: $53,234 (18th highest) > Pct. below poverty line: 15.0% (25th highest) Although many states have budget issues, Illinois faces among the biggest problem s. In 2010, the states budget shortfall was more than 40% of its general fund, th e second-highest of any state. Both S&P and Moodys gave Illinois credit ratings t hat were the second-worst of all states. In addition, the state only funded 45% of its pension liability in 2010, the lowest percentage of any state. Governor P atrick Quinn has made the now-$85 billion pension gap a top priority for the new legislative session beginning in January. 47. Arizona Thinkstock> Debt per capita: $2,188 (12th lowest) > Budget deficit: 39.0% (3rd largest) > Unemployment: 9.5% (tied-13th highest) > Median household income: $46,709 (21st lowest) > Pct. below poverty line: 19.0% (tied-8th highest) Between 2006 and 2011, the value of homes in Arizona tumbled by 35%, more than e very state except for Nevada. The state also had the nations second-highest forec losure rate in 2011, with one in every 24 homes in foreclosure. In the aftermath of the financial crisis, Arizona had some of the nations largest budget shortfal ls. In fiscal 2010, the state had a shortfall of $5.1 billion, equal to 65% of i ts general fund. In fiscal 2011, Arizonas budget deficit was 39.0% of its general fund, the third-highest in the nation. In the recent state elections, residents voted on several measures intended to shore up the states finances. Voters rejec ted the continuation of a sales tax hike, while approving the restructuring of t he states property tax assessment system. 46. New Jersey Thinkstock> Debt per capita: $6,944 (5th highest) > Budget deficit: 38.2% (4th largest) > Unemployment: 9.3% (14th highest) > Median household income: $67,458 (3rd highest) > Pct. below poverty line: 10.4% (3rd lowest) Between 2010 and 2011, New Jerseys GDP contracted by 0.5%, more than all but thre e other states. The states median household income and poverty rate were both thi rd best in the nation. On the other hand, the states tax burden on its residents was second highest in the U.S. in 2010. Residents paid 12.4% of their income in state and local taxes, higher than any other state except New York. The state ha s many budget problems, as well. New Jerseys debt as a percentage of revenue was 91.6%, the fifth-highest of all states. How did your state do? Click here for the full list of the best- and worst-run s tates. Methodology: 24/7 Wall St. considered data from a number of sources, including Standard & Poo rs, the Bureau of Labor and Statistics, the U.S. Census Bureau, the Tax Foundatio n, RealtyTrac, The Federal Bureau of Investigation and the National Conference o

f State Legislators. Unemployment data was taken from the U.S. Bureau of Labor Statistics. Credit rat ings were from ratings agencies S&P and Moodys. We relied on the FBIs Uniform Crim e Report for violent crime rate by state and large metropolitan areas. RealtyTra c provided foreclosure rates. A significant amount of the data we used came from the U.S. Census Bureaus Americ an Community Survey. Data from ACS included percentage of residents below the po verty line, high school completion for those 25 and older, median household inco me, percentage of the population without health insurance and the change in medi an home values from 2006 to 2011. These are the values we used in our ranking. Once we reviewed the sources and compiled the final metrics, we ranked each stat e based on its performance in all the categories. All data are for the full year 2011, with the exception of debt per capita, obtained from the Tax Foundation, and state budgetary data, which came from the U.S. Census Bureau, and is for fis cal year 2010. New to this years study was our more detailed review of state indu stry for 2011, from the the Bureau of Economic Analysis, exports per capita for 2011, from the Census Bureau, and the 2010 tax burden and the current tax busine ss climate, from the Tax Foundation. More From 24/7 Wall St 13 Pro Teams Running Out of Fans Companies Where Everyone Wants to Work States with the Highest (and Lowest) Taxes @YahooFinance on Twitter, become a fan on Facebook Related Content Which Were The Best And Worst Ads Of The Year US drought worsens after weeks of improvement The 3 Best (and Worst) Real Estate Sectors Right Shopping Guru: The Best And Worst Deals You ll 10 States Notorious For Turkey Fry Failures RBI likely sold dollars around 55.50 rupees - Worst Metaphor of 2012: Fiscal Cliff 2012 America s worst 2012 America s worst Best and worst foods Best and worst foods Running Scared Running ScaredVEVO year for West Nile year for West NileFOX News Videos for a good night s sleep for a good night s sleepFOX News Videos

All Comments 2,344 comments Popular Now Newest Oldest Most Replied Tom Tom 2 hours 52 minutes ago Anyone notice a trend on the best states?

Sean Sean 1 minute 48 seconds ago Arizona, there is always one idiot that bucks the trend. Otherwise, Red States Win, Blue States Lose. More Reply Louis Cipher Louis Cipher 2 hours 49 minutes ago It would be interesting to see the complete list. Also how those states compare to the type of legistatures they have. Some states have a part time le gislature. For example unless the governor calls a special session for a specifi c reason, the Texas legislature meets for 140 days every two years to conduct al l the state business. Because they are only part time they can t make a living a s a state legislator, so they have to hold real job in the community and be su bject to the laws they pass. Makes a big difference as to the laws you pass if t hey actually apply to you. Kyle Kyle 7 minutes ago I have lived in TX my whole life and i have always enjoyed it. If yo u work hard enough and earn skills its not hard to find a job either. I was gett ing job offers for high paying jobs before i even graduated High School because of the skills i had acquired. Im going to miss Texas when i move in a few months . In my opinion it is the best state! More Reply stephen stephen 3 hours ago Facts are awesome! A Yahoo! User 4 minutes 45 seconds ago Zanei, Actually, the Conservatives were living in one central location. The problem with liberals is the same as cancer. Just like Cancer spreads to find h ealthy tissue, liberals spread around to find fresh money to take. Unfortunately for liberals and cancer, so much is eventually taken that the host and the dise ase dies. I lived in WI all my life until I moved last year. There were certai n counties that liberals did not even run on the ballots. But yet WI has always gone to liberals. You are making very broad generalizations and observations wit h very little correlation to reality. Where I lived everyone had a two car garag e, let alone needed bus service. What good is a party that wants #$%$ social pro grams when you can provide better opportunities to yourself? Think real hard abo ut that last comment I just made. Think there is a conflict of interest there be tween the liberal party and the middle class??? More Reply Steven S

Steven S 3 hours ago As a Proud Resident of Illinois, I wanted it to be Worst...Maybe Next Ye ar... Duker99 Duker99 1 minute 12 seconds ago General, and exactly what were you doing when the doctor who is trea ting you went to 4 years of college and another 7 years to medical school? And y et you want his money instead of doing what it takes to earn it yourself The onl y person you have to blame for your #$%$ apartment is yourself. More Reply spankindamonkee spankindamonkee 2 hours 57 minutes ago Cali is proof that money is not a solution Silver Silver 1 minute 8 seconds ago @ Adam: CA has had bad roads and crummy schools for decades.....long before Enron. More Reply Louis Cipher Louis Cipher 2 hours 43 minutes ago Another article that would have been interesting before the election. Beast Beast 36 minutes ago Wouldn t have made a difference if they ran this article before the election anyway, those that voted blue are too stupid to read or believe facts o ver color if they could. More Reply Shut The Front Door Shut The Front Door 54 minutes ago Question for Californians: Your state is over $16 billion in the hole. Y ou have the worst immigration problem in the nation by a landslide. Unemployment is 2nd worst in the country. Some of the highest taxes of all 50 states. You ha ve the worst pollution and the worst traffic in the country. Your housing market is in the toilet and you re probably a year or so away from declaring bankruptc y....and yet you continue to vote for the same people over and over to run your broken state. Why? Ralph23 Ralph23 1 minute 51 seconds ago Because we (legal U,S. born citizens) are outnumbered by illegal imm igrants and their sympathizers, and we re afraid to guard our borders or stop il legal immigration because then everyone accuses us of being "racists".

More Reply White Chocolate White Chocolate 2 hours 47 minutes ago Hmm what is the pattern here? nurtseybelle nurtseybelle 9 minutes ago Hopefully White it s not "As California goes so goes the rest of the United States" More Reply andy andy 3 hours ago California worst? N way! I mean, taxing people to death isn t a good ide a? Who would have thought!? Just an average American Just an average American 5 minutes ago I have friends and family in the Bay Area. They are quite sick of th e high taxes on personal incomes and businesses there and are looking to move el sewhere. Sad, because they really love the natural beauty there. Sometimes, the price to pay to live in paradise is just too steep, with all the parasites aroun d. California is experiencing a net lost of skilled and employed tax paying citi zens and an influx of leeches. Yet, the state decided to increase taxes without cutting spending. This country can have a good look at California because that i s where we are heading. More Reply Tom Tom 2 hours 37 minutes ago CA is the worst. They put a man in jail and fined him for selling raw mi lk. But they trashed his store and seized his assets, so how is going to pay the fine? roger roger 8 minutes ago Maybe george would like to explain the population of detroit,,, 50% can not read a ballot. More Reply Shadez Shadez 2 hours 30 minutes ago As a resident of The Golden State, I m working with other fellow Califor nians to come up with a state motto to help reverse this trend. Submitted for yo ur ridicule: KEEP CALIFORNIA GREEN -- BRING MONEY!!! spewing_venom619

spewing_venom619 3 hours ago Hmmmm, wonder what the breakdown is when political party running state i s taken into consideration? EndofaNation EndofaNation 2 hours 30 minutes ago City of San Berdino is going bankrupt - canceling bond payments..althoug h this isn t newsworthy enough for headlines on yahoo. fredralist fredralist 3 hours ago California needs more illegal Mexican billionaires..... oldfan oldfan 2 hours 36 minutes ago Hmm no political affiliation to go along with this article? And NYS is not on the worst list? How can that be? Steve Steve 2 hours 11 minutes ago Obama gave Brazil 2 billion dollars to drill for their own oil and their economy took off. Brazil jumped to the 8th largest economy in the world pushing California down to 9th. This summer the price of gasoline reached a record high in California. I like seeing people who vote to get punched in the face, get pu nched in the face. Robert Robert 1 hour 8 minutes ago Go figure. States with no major urban centers are doing better. Maybe th e people who live in those states were brought up with a better work ethic. I ll bet crime rates are much lower there as well. Roger Roger 1 hour 2 minutes ago Its interesting that the states doing bad have a larger union presence a nd or larger populaions of illegal immigrants. JBA JBA 2 hours 1 minute ago When the economy finally tanks all the states that based their wealth on fiat paper money will suffer the most. The states with natural resources combin ed with a population that understands the value of hard work and perseverance wi ll shine. noneya noneya 59 minutes ago What state has lost the highest percentage of companies and population t he last few years? California followed by illinois. More Post a comment

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