Texas would have adequate revenues to manage a moderate economic downturn without raising taxes or cutting services, according to a new analysis from Moody’s Analytics.
If a moderate recession were to strike, Texas would have 15.8 percent of its total 2019 revenues available, the analysis says. That’s the fifth best outcome among the 50 states, according to Moody’s Analytics.
That state’s current rainy-day balance represents 20.8 percent of its 2019 revenues, the study found. The severity of the fiscal shock the state would face in a moderate recession equals 12.4 percent of the 2019 funds, according to the study.
Twenty-eight states were found to have adequate revenues to weather such a downturn in the future, the study said. But 10 states would have significantly less money on hand than they would need.
The stress test numbers show that states on average would need funds equaling 11.3 percent of their general fund revenues to weather the recession without tax hikes or service cuts, according to Moody’s Analytics.
Fiscal shock estimates can vary depending on a state’s tax structure and the makeup of its economy, the study found. States with greater dependence on energy development and tourism, for instance, tend to be more vulnerable to recessionary upheavals, the report said.
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State Fiscal Preparedness in a Moderate Recession
| State | Rainy-Day Balances | Total Balances | Fiscal Shock | Rainy-Day Surplus / Shortfall | Total Surplus / Shortfall | Rank |
| Wyoming | 138.3% | 138.8% | -8.5% | 129.9% | 129.9% | 1 |
| Alaska | 134.3% | 120.5% | -39.3% | 95.0% | 81.1% | 2 |
| North Dakota | 41.7% | 45.3% | -21.8% | 19.8% | 23.5% | 3 |
| Oregon | 11.6% | 25.6% | -7.0% | 4.6% | 18.6% | 4 |
| Texas | 20.8% | 28.2% | -12.4% | 8.4% | 15.8% | 5 |
| West Virginia | 16.0% | 23.2% | -9.2% | 6.8% | 14.0% | 6 |
| Nevada | 7.7% | 22.7% | -10.7% | -3.0% | 12.0% | 7 |
| Delaware | 5.4% | 17.2% | -8.5% | -3.2% | 8.7% | 8 |
| New Mexico | 8.7% | 16.4% | -8.8% | -0.1% | 7.6% | 9 |
| Alabama | 9.4% | 15.2% | -10.0% | -0.6% | 5.2% | 10 |
| Minnesota | 10.6% | 13.3% | -8.8% | 1.8% | 4.5% | 11 |
| Iowa | 9.9% | 12.3% | -8.6% | 1.3% | 3.7% | 12 |
| Indiana | 8.4% | 13.5% | -9.8% | -1.4% | 3.6% | 13 |
| Hawaii | 4.9% | 12.7% | -9.2% | -4.3% | 3.5% | 14 |
| California | 13.0% | 16.5% | -13.1% | -0.1% | 3.4% | 15 |
| South Dakota | 10.7% | 10.7% | -7.5% | 3.2% | 3.2% | 16 |
| Nebraska | 7.0% | 13.5% | -10.4% | -3.5% | 3.0% | 17 |
| Connecticut | 10.0% | 12.6% | -10.1% | -0.1% | 2.5% | 18 |
| South Carolina | 6.3% | 16.6% | -14.2% | -7.9% | 2.4% | 19 |
| Utah | 8.8% | 11.1% | -9.0% | -0.2% | 2.1% | 20 |
| Georgia | 11.1% | 11.1% | -9.7% | 1.4% | 1.4% | 21 |
| Maryland | 4.9% | 9.3% | -8.3% | -3.4% | 1.0% | 22 |
| Arizona | 4.3% | 12.2% | -11.7% | -7.4% | 0.5% | 23 |
| Maine | 7.5% | 10.6% | -10.3% | -2.8% | 0.3% | 24 |
| Tennessee | 5.8% | 11.2% | -11.0% | -5.1% | 0.2% | 25 |
| Vermont | 11.8% | 11.8% | -11.7% | 0.1% | 0.1% | 26 |
| Washington | 7.2% | 9.7% | -9.6% | -2.4% | 0.0% | 27 |
| Missouri | 3.3% | 9.8% | -10.4% | -7.0% | -0.5% | 28 |
| North Carolina | 5.2% | 8.5% | -9.6% | -4.4% | -1.1% | 29 |
| Idaho | 13.2% | 16.4% | -17.7% | -4.5% | -1.3% | 30 |
| New York | 2.9% | 8.9% | -10.3% | -7.4% | -1.4% | 31 |
| Ohio | 8.1% | 10.6% | -12.2% | -4.1% | -1.6% | 32 |
| Kansas | 0.0% | 9.3% | -11.2% | -11.2% | -1.9% | 33 |
| Colorado | 9.2% | 9.2% | -11.1% | -1.9% | -1.9% | 34 |
| Michigan | 11.3% | 13.6% | -16.5% | -5.2% | -2.8% | 35 |
| Massachusetts | 5.5% | 5.7% | -9.4% | -4.0% | -3.8% | 36 |
| Montana | 1.9% | 8.8% | -12.7% | -10.8% | -3.8% | 37 |
| Virginia | 5.8% | 6.0% | -10.3% | -4.5% | -4.3% | 38 |
| Rhode Island | 5.1% | 5.1% | -9.8% | -4.7% | -4.7% | 39 |
| Wisconsin | 1.9% | 6.1% | -10.9% | -9.0% | -4.8% | 40 |
| Florida | 4.4% | 9.3% | -14.9% | -10.5% | -5.6% | 41 |
| New Hampshire | 7.7% | 7.7% | -13.8% | -6.1% | -6.1% | 42 |
| Arkansas | 2.7% | 3.8% | -10.2% | -7.4% | -6.3% | 43 |
| Mississippi | 5.6% | 5.6% | -12.3% | -6.7% | -6.7% | 44 |
| Pennsylvania | 0.1% | 0.1% | -7.5% | -7.4% | -7.4% | 45 |
| New Jersey | 0.0% | 2.9% | -10.4% | -10.4% | -7.5% | 46 |
| Oklahoma | 5.9% | 8.6% | -16.1% | -10.2% | -7.5% | 47 |
| Kentucky | 1.1% | 1.1% | -10.0% | -8.8% | -8.0% | 48 |
| Illinois | 0.0% | 1.0% | -10.9% | -8.8% | -8.8% | 49 |
| Louisiana | 3.7% | 7.0% | -18.9% | -15.2% | -11.9% | 50 |
Source: Moody’s Analytics
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