ST. PAUL - Minnesota is the best-run state in the nation, according to a new study from USA Today, knocking off North Dakota that ranked No. 1 for five straight years.
North Dakota was ranked seventh and South Dakota 13th in a look at all 50 states.
Researchers reviewed economic indicators, budget allocations and balance sheets, in addition to a range of social measures, to rank how well each state is run.
Gov. Mark Dayton's office said the study noted Minnesota's strong fiscal management, low unemployment and poverty rates, above-average median household income, and the state's nearly perfect credit rating. Since ranking 10th in 2012, Minnesota has consistently climbed in the rankings under the same study, including ranking second last year, Dayton's office said.
As for North Dakota, the study's authors said, "For much of the past decade, an oil boom led to economic growth and an explosion of jobs in the state. However, falling oil prices have contributed to GDP declines over the past several years, and the effects of these declines were finally enough to push the state out of the No. 1 position."
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Minnesota took over the top ranking from its neighbor as the authors wrote, "A relatively wealthy state, Minnesota's $65,599 median household income is about $8,000 more than the median income nationwide. In Minnesota, higher tax revenue means the government can save more. The state has saved the equivalent of 10.3 percent of its annual spending in a rainy day fund-more than most states and greater than the 8.2 percent average across states. Minnesota has a nearly perfect credit rating from Moody's with a stable outlook."
Also boosting Minnesota to the top ranking were its jobless rate at 3.3 percent (the lowest since 2000) and 13th best in the nation with a rate at or below 4 percent for 40 straight months; a poverty rate of only 9.9 percent, sixth nationwide; and pension funding at 79.88 percent, 13th in the country.
"This administration has worked hard to make state government work better for the people of Minnesota - and we are not done yet," Dayton said. "Next session, I will urge the Legislature to work with me to protect the long-term fiscal stability of our state, which is essential for Minnesota's future. Working together, I know we can deliver even better services, and better value, for the people of Minnesota."
"Strong fiscal management, along with strategic investments in education and economic opportunity, together have made Minnesota more successful. Minnesotans are doing well, but we have more work to do to ensure everyone has the opportunity to succeed." said Lt. Governor Smith, who has led state government reform efforts for the Dayton administration.
She said the state has made investments in education "every year - no excuses, no exceptions - to grow greater opportunity for all Minnesota families."
As for North Dakota, it's still fairly high ranking was led by a jobless rate of 3.2 percent making it the fifth lowest in the nation, and a bond rating of a near perfect Aa1, which Moody's said was because of its "history of sound budget management and strong reserves."
North Dakota also had a poverty rate of 10.7 percent, which was 10th best in the nation, and a pension funded ratio of 70.4 percent, the 22nd best.
Moody's gave the state's credit rating a negative outlook, suggesting a prolonged economic downturn could lead to a downgrade.
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"If that happens, North Dakota might fall even further down the list in next year's ranking," said the study's authors.
The authors also said there is "no one-size-fits-all formula for effective state governance, and in this way, no two states are exactly alike. Still, some states are managed far more proficiently than others."
The worst two states were No. 49 New Mexico and No. 50 Louisiana.
Evan Comen and Samuel Stebbins were USA Today authors of study and story
