New Mexico’s Fiscal Fitness: Not Impressive

“Ranking the States by Fiscal Condition,” just issued by George Mason University’s Meractus Center, offers a valuable survey of revenue and expenditures in New Mexico. As one might expect, the news isn’t pretty. The state isn’t in the company of such perennial deadbeats as New York, Connecticut, New Jersey, and Illinois, but there’s plenty of room for improvement.

Author Eileen Norcross analyzed five “dimensions of solvency” in order to determine overall fiscal condition:

* Cash solvency looks at whether a state can “pay bills that are due over a 30-to-60-day horizon.” New Mexico fares well in this category, ranking 19th.

* Budget solvency examines “whether the state can meet its fiscal year obligations.” The Land of Enchantment performs quite poorly here, landing in 46th place.

* Long-run solvency is determined by three metrics: net asset ratio, long-term liability ratio, and long-term liabilities per capita. New Mexico achieves it best score in this category: 14th.

* Service-level solvency “attempts to capture how much ‘fiscal slack’ states have by measuring the size of taxes, expenses, and revenues relative to state personal income.” The results for New Mexico are abysmal — only two states fare worse.

* Trust fund solvency is an estimate of “total indebtedness in the form of bonded debt, risk-adjusted pension liabilities, and [other post-employment benefits]. Ditto here, with a downright scary rank of 48th.

Overall, New Mexico ranks 36th in fiscal condition. Not surprisingly, each of our neighbors posted a superior score: Arizona (32nd), Colorado (22nd), Texas (19th), Utah (11th), and Oklahoma (9th).