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!
Rank: California Counties
2020 Counties Report coming soon
Rank: California Public School Districts, Colleges & Universities
Rank: U.S. States
2019 States Report Coming Soon
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
- April 2017: 6 Key California Transportation Figures
- January 2017: 6 Key Measures of California’s Fiscal Health
- June 2016: Senator Moorlach’s Budget Deadline Update
- January 2016: 6 Key Measures of California’s Fiscal Health
- June 2015 Budget Update: 5 Key Indicators of California’s Fiscal Health
- August 2015: 7 Key Measures of California’s Transportation Challenges
- June 2015 Budget Brief