Improve Washington State Fiscal Health (Draft)
WA state government faces increasing demand for public services due to many factors including federal and state policies and judicial decisions, a growing and aging population, and climate change.
The state’s fiscal health is dependent upon several factors over which the state has varying degrees of influence. This dashboard displays several factors that reflect or impact the state’s fiscal health.
Bond Rating - When the state needs cash to pay for special projects, such as seismic upgrades to schools, it issues bonds. Bond ratings indicate how likely the state is to responsibly pay down its debt. Ratings reflect the most recent reporting period and only the “A” ratings are shown. Ratings impact investor choices and interest rates.
Public Employee Retirment Fund - The Washington State Investment Board manages over $100 billion in retirment funds for public employees. Washington State ranks 8th in the U.S. among states' funded for funded ratio and 4th among states' operating cash flow ratio. Only two states, South Dakota and Wisconsin, have funded ratios above 95%.
Economic Condition Index - The Government Accounting Standards Board (GASB) developed a comprehensive concept of government financial health called economic condition. It’s a composite of a government’s financial health and its ability and willingness to meet its financial obligations and commitments to provide services. Economic condition includes three components: financial position, fiscal capacity, service capacity.
** Operating cash flow ratio
This public retirement financial ratio was developed by the Pew Charitable Trusts in 2016. It measures the difference between financial outflows (primarily benefit payments) and cash inflows before investments (primarily employer and employee contributions) divided by assets at the beginning of the year. A ratio of 3 percent, for example, would need to achieve investment returns of at least 3 percent that year to keep assets from dropping.