The States Best Prepared to Weather the Next Recession

It's only a matter of time before the next economic downturn comes along. How ready is your state?

Storm gathering over large city.Steve Nahuysen /

We’d like to think we can avoid another recession, but we can’t. Economic expansion followed by recession is simply the way things work in a capitalist society.

Since we know it’s not a question of if, but rather when, a recession hits, we all need to be prepared. For families, that means having an adequate emergency fund. For states, it requires putting enough into reserves to ride out a downturn.

to see how well they would weather a moderate recession. The group compared actual reserves, as a percentage of state revenues, with the necessary reserves a state would require to comfortably withstand an economic downturn. (How much a given state needs to hold in reserve varies depending on particular economy and tax structure.)

The analysis, which updates findings from a , shows some states are making progress. There are 23 where reserves are looking good, compared to 16 a year earlier. Meanwhile, 10 states have most of the funds they would need to squeak by (compared to 17 earlier) and the report predicts 17 states are going to be in serious trouble in a recession, based on their current reserves.

Here’s a ranking of all 50 states — starting with those best prepared for recession according the reserves that they hold and ending with states that need to start saving ASAP. Find out where your state stands.

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