State Budget Practice Report Cards and Budget Resource Guide

Delaware was among the more than twenty states getting an average A grade from 2015 through 2017 in the category of budget maneuvers. The state didn’t employ such relatively common techniques as using up-front cash flows at the time of bond refinancing and making transfers into the general fund from special funds to pay for recurring expenditures.

The state did not do as well in its handling of legacy costs, another of the five budgetary areas evaluated by the Alliance, and earned an overall grade of C for the period. While Delaware made the annual public worker pension contributions that fund actuaries recommended, that was not the case with its funding of other postemployment benefits, principally promises it has made to employees for health care in retirement. 

According to the Postretirement Health Plan Actuarial Valuation Report as of July 1, 2015, the annual required contribution for fiscal 2016 was $421.4 million; the projected state contribution was $205 million, which was about 48 percent of the amount actuaries deemed necessary. The state’s unfunded liability for these benefits is about $6 billion, equal to 13.8 percent of state personal income, according to the report.

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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 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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