Alabama

State Budget Practice Report Cards and Budget Resource Guide

Alabama’s budgetary practices are among the nation’s weakest. In the five budget categories graded by the Volcker Alliance from fiscal 2015 through 2017, the state did slightly worse than nearby Arkansas and far less well than neighboring Mississippi, with which it is often compared.

In budget transparency, Alabama (along with only two other states—Arkansas and New Mexico) received D grades in all three years studied. Like Arkansas, New Mexico, and Oklahoma, Alabama failed to produce a consolidated budget website. Having such a site is a best practice that can give taxpayers, policymakers, and others an opportunity to learn critical facts about a state’s budgetary status via a single online portal.

Alabama earned even worse grades in budget forecasting, getting straight D-minuses. It lacked consensus revenue forecasts that can give the executive and legislative branches a single number upon which to build a budget, didn’t provide multiyear expenditure forecasts or revenue forecasts, and failed to provide a detailed rationale to support revenue growth projections. Such shortcomings hamper Alabama’s ability to plan for the future.

One area in which the state performed better was the level and management of its fiscal reserves, where it earned a B in each of the years studied. Although Alabama did not adhere to the Volcker Alliance’s recommendation that general fund or rainy day account balances should be tied to historical revenue volatility, it has maintained a positive reserve balance and, unlike some other states, has formal policies for disbursing and replenishing its reserve funds. 

Download Printable State Report Card

To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.

The report cards presented here are taken from the 2017 Volcker Alliance report, Truth and Integrity in State Budgeting: What Is the Reality? which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

Select a State Below to View State Report Cards and Budget Sources

Click Here to View National and Multi-State Budget Sources