FW Rank: 12

1992 Rank: 14

Population: 1.3 million

Moody's bond rating: Aa

Standard & Poor's bond rating: AA

Governor: Robert Miller, Democrat

Legislature: Democratic majority in House; Republican majority in Senate

-- Ranking pluses: Efforts at strategic planning; responsible budgeting aimed at maintaining balance despite revenue shortfalls; evolving performance measurement system (though with more emphasis on effectiveness needed); good estimates of Medicaid spending; GFOA Certificate of Achievement for Excellence in Financial Reporting; well funded pension.

-- Ranking minuses: Revenue projections only cover the next biennium; some revenue estimating problems; room for more program evaluation; rainy day fund is currently empty.

-- Comments: The state industrial insurance system, which handles workers; compensation, is in trouble. Its unfunded liability has mushroomed in recent years - with some actuaries placing the unfunded amount as high as $2.2 billion. The legislature has been consumed with efforts to reform the system, a process complicated by conflicting actuarial reports. Revenue shortfalls and $178 million in budget cuts last year prompted the governor to set up a commission to reexamine state government. Details are still fuzzy, but a large reduction in boards and commissions, agencies and middle management positions is likely. Gaming revenues, weakened by the poor economy, are holding their own, but the expansion of gambling activities in other states is a continuing cause for concern.

Source: "The State of the States," Financial World Magazine, May 11, 1993 (Vol. 161, No. 10); New York, NY.