Fiscal Issues

Financial Soundness Rankings

Many of California’s governments are in financial distress, facing fiscal challenges that may lead to insolvency. While the reasons are different for each governmental unit, there are costs that our state, counties, cities, and school districts can no longer ignore, whether it is their unfunded pension liabilities, bond indebtedness, or unsustainable personnel costs. It is long past time to provide a useful fiscal assessment of these costs so the legislature can better address the challenges ahead.

In order to assess the fiscal health of thousands of governmental units accurately, I review audited financial statements presented in each government’s Comprehensive Annual Financial Reports (CAFR). The per capita unrestricted net position (UNP) of these governmental units provides a solid model of their fiscal health. 


Rank: California Cities

2019 Cities Report NEW!

2018 Cities Report


Rank: California Counties

2019 Counties Report NEW!

2018 Counties Report


Rank: California Public School Districts, Colleges & Universities 

2019 School Districts Report NEW!

2018 School Districts Report


Rank: U.S. States

2019 States Report Coming Soon

2018 States Report


Tearful Time for the Duke, The Day John Wayne’s Orange County Went Broke

A month after Orange County filed for bankruptcy protection, famed economist Arthur Laffer provided his incisive analysis, co-written by two associates: “Orange County’s investment pool as of November 30, 1994, was highly leveraged and had been on the wrong side of a large interest rate move. As a consequence, Orange County’s investment pool had experienced substantial market losses…. The investment pool’s published accounts were not marked to market, and therefore on the official books the investors’ net worth was $7.58 billion. In market terms however the net value of the investment pool’s securities was actually more like $5.03 billion or 34 percent below published book value.”

But Laffer saw great promise despite the disaster. “The opportunity for doing things differently is ripe and it is our view that the changes are imminent,” he found. “Orange County’s troubles may well turn out to be a blessing in disguise.”

Laffer’s full piece, used by permission of Laffer Associates, is here.


Measuring California's Fiscal Health

Moorlach's Measures