Hawaii

State Budget Practice Report Cards and Budget Resource Guide

Hawaii was a leader among the fifty states in three of the categories evaluated by the Volcker Alliance for fiscal 2015 through 2017, receiving straight A’s in budget forecasting, budget maneuvers, and reserve funds. It followed best practices in every one of the broad criteria examined in all three of those budgetary fields.

In budget forecasting, Hawaii was one of just nine states to earn an average grade of A over the three years studied. Hawaii creates multiyear expenditure and revenue forecasts, which can allow it to predict the future impact of current actions and take steps to ameliorate future fiscal burdens they may create. In 2017, for example, Hawaii’s biennial budget package included tables disclosing multiyear revenue and expenditure forecasts through fiscal 2021.

At the opposite end of the spectrum, Hawaii received the lowest possible grade, a D-minus, in all three years of the evaluation for its public employee pension and public employee postretirement health care funding practices.

With only 62 percent of assets needed to meet obligations, Hawaii’s pension funding is 10 percentage points below the 2015 average for all states. The actuarially required contribution for Hawaii’s pensions for fiscal 2017 was $772 million, but the state appropriated only $555.9 million. Its net annual required contribution for postemployment health care for fiscal 2017 was $776.9 million, versus $409.7 million appropriated. Under a law passed in 2013, the state is scheduled to begin making full actuarially determined contributions for OPEB by fiscal 2019.

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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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