State Budget Practice Report Cards and Budget Resource Guide

When it comes to gauging the possible future course of its budget, Florida has few equals. It is one of only nine states to win a top average grade of A for fiscal 2015 through 2017 from the Volcker Alliance for its strengths in budget forecasting.

Florida has historically used consensus revenue estimates, a best practice, based on input from the governor’s office, the state Office of Economic and Demographic Research, the Senate, and the House of Representatives. The process is intended to ensure that multiple contributors determine a single revenue number on which to build a budget, leaving more time to debate spending priorities. Florida provides reasonable, detailed rationales to support revenue growth projections at the time budgets are initiated. It has followed another best practice by disclosing at least three full years of revenue and expenditure projections in budget and planning documents. In the three years studied, Florida also was able to avoid midyear budget adjustments to compensate for any miscalculated estimates at the beginning of each fiscal year.

The state received lower grades in the four other budgetary categories the Alliance evaluated. In reserve funds, transparency, and budget maneuvers, Florida got straight B’s for the three years. Its grade for reserves was affected by the lack of a link between revenue volatility and rainy day fund policies. The state got a C in legacy costs for the period. While it made the contributions to public worker pensions recommended by retirement fund actuaries, it failed to do so for its future obligations for other postretirement benefits, primarily retiree health care. Instead, Florida covers such costs on a pay-as-you-go basis.

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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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