State Budget Sources

Alaska has been hard-pressed to come up with sufficient revenues to cover government expenses after a drop in the price of oil—the state’s economic engine—produced a steady procession of job losses. So, like other states with severe budget stresses, Alaska has resorted to using one-time measures to keep revenues in balance with expenditures. Partly as a result, Alaska’s budget maneuvers grade from the Volcker Alliance for fiscal 2015 through 2017 fell to C in the last two years from B in 2015.

The 2016 budget adopted by the state legislature appropriated $700 million from the general fund for refundable oil exploration spending, but the governor vetoed $200 million of the total. Rather than being eliminated, these obligations to oil and gas companies will be shifted to future years.

In contrast to its falling grade in budget maneuvers, Alaska was one of only two states (along with California) to earn an average grade of A for transparency over the three years studied. The deciding factor was the two states’ disclosure of deferred infrastructure replacement costs. Alaska’s Legislative Finance Division, which provides budgetary analyses, summarizes deferred maintenance by department in its annual overview of the governor’s budget request. The estimated backlog of projects was about $1.8 billion at the time of the fiscal 2016 request.

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). 

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