NCPA - National Center for Policy Analysis

How States Manage Their Money

February 2, 1999

A study by Governing magazine and the Maxwell School of Citizenship and Public Affairs, at Syracuse University concludes that states do a fairly good job of managing their money. The detailed, 50-state survey graded the states from A to F in five categories of management performance.

  • Virginia, Missouri, Utah and Washington received average grades of A- for the five areas and Alabama got the lowest average grade, D .
  • Thirty-nine states scored well in fiscal management -- saving regularly, investing soundly and spending sparingly.
  • Twenty-six states scored well on workplace issues -- often rewarding employees for good performance.
  • Only 17 states did well on information technology -- with the others receiving low marks for not upgrading and making better use of their computers.

The researchers could not identify a pattern in the results. Whether states were big or small, rich or poor had little to do with their grades. Many of the largest, most sophisticated states performed poorly -- including California and New York.

Many states have rainy-day funds equal to at least 5 percent of their operating budgets.

Source: Katherine Barrett and Richard Greene, "Grading the States: A Management Report Card," Governing, February 1999.


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