Kentucky’s pension crisis contributed to its ranking among the worst state economies in the nation, according to a new data-based study.
According to the analysis from WalletHub.com, Kentucky’s economy is ranked 45th in the country out the 50 states and the District of Columbia.. The states were judged based on data showing economic health and activity along with innovation potential.
Data was obtained from several sources, including the U.S. Census Bureau, Bureau of Labor Statistics and Bureau of Economic Analysis.
Kentucky is ranked 38th in the United States in unfunded public pension plans per capita, according to a WalletHub spokesperson. The pension crisis is a hot topic in the governor’s race between GOP incumbent Matt Bevin and Attorney General Andy Beshear, a Democrat.
In the study’s economic health category, which included pensions, Kentucky was 45th. This category also includes unemployment rates, share of the population in poverty, and growth in number of businesses, among other statistics. According to the Bureau of Labor Statistics, Kentucky’s unemployment rate was 4.0 percent as of April, which is slightly higher than the national average of 3.8 percent.
Kentucky’s government surplus was also a reason for Kentucky’s low economic health ranking. Kentucky had the third-lowest government surplus in the country per capita, according to WalletHub. The state’s $114.4 million budget surplus at the end of the 2017-18 fiscal year was better than previous predictions, according to Kentucky Today.
Despite successes of some Kentucky startups — including Lexington-based mobile phone marketer Xooker and Lexington-based internet marketer Fooji — startup activity falls way behind other states, ranking 47th in the WalletHub study.
Despite a low ranking for startup activity, the state got decent marks for economic activity. That more favorable ranking of 33 out of 51 is partially due to Kentucky being tied for first — with a handful of other states — for the most exports per capita. According to ThinkKentucky.com, the state’s leading export products are aerospace products; motor vehicles and parts; and pharmaceuticals.
Kentucky’s innovation potential ranking, which included entrepreneurial activity and jobs of in high-tech industries, was 46th.
Kentucky’s overall economy ranking led only Arkansas, West Virginia, Hawaii, Mississippi, Louisiana and Alaska.
Washington has the best economy in the country, according to WalletHub’s rankings.