Indiana

State Budget Practice Report Cards and Budget Resource Guide

Indiana received top grades from the Volcker Alliance in 2015 and 2016 in the categories of reserve funds and budget maneuvers. The state retained the A in reserves in 2017 but fell to a B in maneuvers by using a bond refinancing transaction that included no payments of principal until 2021.

The Indiana Finance Authority’s official statement in fiscal 2017 for the issue of highway revenue refunding bonds maturing in 2029 showed that the agency put off near-term principal payments to 2021. Total debt service costs were reduced by the refinancing over the life of the issue even though the Authority gave up savings in the early years for greater savings later.

Indiana received average grades of C in budget forecasting and transparency over the three years studied. The state’s weaknesses in budget forecasting include an absence of multiyear expenditure and multiyear revenue estimates.

The state’s transparency grade suffered from a lack of disclosure of tax expenditures. In addition, like all but two states (Alaska and California), Indiana failed to disclose deferred infrastructure replacement costs.

Download Printable State Report Card

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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