JEFFERSON CITY, Mo. (AP) – A new report finds that many states are in better shape than ever to weather a potential recession.
The report released Monday by Moody’s Analytics says 28 states have enough cash on hand to survive a moderate recession without having to resort to spending cuts or tax hikes. An additional 12 states are only slightly short, meaning they also could likely avoid taking drastic financial measures.
Moody’s Analytics based its conclusions on the amount of savings that would be necessary to cover a likely decline in state tax collections and increase in state Medicaid expenditures if a recession were to occur. It is not forecasting a recession in 2020.
The report ranked Louisiana, Illinois and Kentucky as the states least prepared to handle a downturn in the economy.