State Budget Practice Report Cards and Budget Resource Guide
Despite deep-seated fiscal woes that delayed passage of its biennial budget by almost four months in 2017, Connecticut scored relatively well in three of the five budgetary categories evaluated by the Volcker Alliance for fiscal 2015 through 2017.
The state garnered overall B marks for transparency and reserve funds, and its forecasting grade rose from B in 2015 and 2016 to A in 2017 because Connecticut avoided midyear budget adjustments in 2017. That made it one of just nine states to receive the highest possible grade in the category that year. Reflecting its use of a best practice in estimation, Connecticut’s two-year budget, which started July 1, 2015, included projections for fiscal 2018, 2019, and 2020, with detail provided by fund and revenue source, along with the assumptions used to make the projections.
Connecticut did not fare well in managing costs for pensions and postretirement health care benefits over the long term and received straight D’s for the three years covered. Even though the state made its actuarially determined contributions for the three years studied, past decisions to appropriate less than actuaries recommended left Connecticut facing unfunded liabilities of $27 billion in the pension system. Connecticut has just 49 percent of what is needed to pay promised benefits, versus an average of 72 percent for all US states as of 2015.
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 found here contain grades of the state's budgetary practices during the fiscal years of 2015 through 2017. Each state received marks in five critical categories, based on their adherence to best practices in several key budgeting indicators. The five categories covered methods used to achieve budgetary balance as well as how budgets and other financial information are disclosed to the public.
States received grades of A to D-minus (there are no “failed states”) for their procedures in estimating revenues and expenditures; their use of one-time actions to balance budgets; how they oversee and use rainy day funds and other fiscal reserves; the adequacy of their funding of public worker retirement and other postemployment benefits; and the quality of transparency of budget and related financial information. The grades are based on research conducted by public finance and budgeting professors and students at eleven US schools of public administration or policy. The universities’ research efforts were augmented by Volcker Alliance staff, data consultants at Municipal Market Analytics, and special project consultants Katherine Barrett and Richard Greene.
State Budget Sources
State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses is a resource published by the Volcker Alliance designed to help public officials, policy advocates, journalists, academics, and concerned citizens fully understand the critical fiscal decisions that governors and legislators must make. The guide includes the links below to budgets for this state as well as legislative analyses of budget bills and treasurers’ or comptrollers’ monthly state cash-flow statements; capital spending plans; reports on public-worker pension funding and returns; and reports by local and national fiscal research organizations, bond rating firms, and associations of state fiscal and finance officials.