Alaska

State Budget Practice Report Cards and Budget Resource Guide

Alaska was one of only four states—the other three are Hawaii, Tennessee, and California—to disclose the costs of deferred infrastructure replacement in 2018. That disclosure helped Alaska garner an average grade of A in the transparency category for fiscal 2016 through 2018, even as it grappled with a deferred infrastructure replacement backlog of $1.9 billion for 2,200 facilities as of January 2018, according to the state’s Legislative Finance Division. 

With an economy dependent on fluctuating revenues for oil and natural gas production, Alaska used a variety of one-time actions to balance budgets in the three years examined, leaving it with an average grade of C in budget maneuvers. In fiscal 2018, for example, the state deferred recurring expenditures and shifted a total of $2.5 billion into the general fund from the Statutory Budget Reserve and the Constitutional Budget Reserve funds. 

In contrast to its mark for budget maneuvers, Alaska was one of seventeen states receiving an average grade of A in the reserve fund category for the three years studied. The Constitutional Budget Reserve Fund is governed by clear rules concerning disbursements and replenishments. Alaska was also among the nineteen states that tied goals for reserve funds to historical revenue volatility in 2018.

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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 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis 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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