Last week, Moody's evaluated the ability of certain states to deal with a potential recession in the coming years. They looked first at the country's four most populous states and found that Texas is better prepared than Florida, New York, and California.

The report took a less in-depth look at the 20 most populous states; among these, Texas, Missouri, and Washington are "most prepared for a recession while California and Illinois are least prepared." (One reason given for why California wouldn't do well in case of a recession is its reliance on personal income taxes.) Unfortunately, the report is subscription only. According to the press release,

"The measures we assessed—revenue volatility, deficit coverage by financial reserves, revenue and spending flexibility, and fixed costs as a percentage of revenues —provide an indication of recession readiness of the most populous states during the next two years," Emily Raimes, a Moody's Vice President — Senior Credit Officer says.

While it's nice that Washington is in better fiscal shape than many other states, that could be cold comfort in the event of a bad recession — especially given the need for the Legislature to complete its response to the McCleary decision next session.

That said, in the most recent episode of our Policy Today podcast (which is a preview of the issues to come in next year's budget negotiations), we talked about the possibility of a recession. Kriss doesn't think we'll be dealing with one next year.