State Budget Practice Report Cards and Budget Resource Guide

Louisiana is among fifteen states that failed to get a top A grade in fiscal 2015, 2016, or 2017 in any of the five budgetary categories assessed by the Volcker Alliance.

In the categories of reserve funds and transparency, the state received an average B grade for all three years. The transparency grade was restrained by an absence of disclosure of deferred infrastructure replacement costs in budget documents (only Alaska and California meet that standard). Louisiana’s B for reserve funds reflects its not tying reserves to revenue volatility. Only fourteen states did so in all three years covered.

Louisiana received an average grade of C for budget maneuvers over the period, partly as a result of its dependence on one-time measures to achieve balance as its revenues slumped amid falling oil and natural gas prices and a near-doubling of corporate tax exemptions. The state had previously followed a best practice by putting one-time federal dollars received after Hurricane Katrina in 2005 toward one-time expenditures to repair storm damage.

Louisiana’s straight D’s in legacy costs was partly driven by its failure to make actuarially determined contributions for public workers’ postemployment benefits, principally retiree health care. The state’s pension funding level of 63 percent was 9 percentage points below the 2015 average for all states.

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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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