State Budget Practice Report Cards and Budget Resource Guide
Maryland’s skill at budget forecasting, one of five budgetary categories evaluated by the Volcker Alliance over fiscal 2015 through 2017, won it the top average grade of A. Its handling of legacy costs landed the state near the bottom, however, with a D average for its funding of public employee pensions and other postemployment benefits (OPEB), principally health care.
For all three years studied, the state failed to make the contribution to OPEB that its actuaries had recommended. While it also failed to do so for pensions in 2015, it did make its full contribution in the following two years. The retirement system’s actuary projects that the system will reach a funding level of 80 percent by 2021, up from 68 percent in 2015.
Maryland’s C average in the budget maneuvers category is largely attributable to shifting revenues and costs to achieve balance, as well as to funding recurring expenditures with debt. Its C in reserve funds is due primarily to the state’s failure to establish sufficient controls over the disbursement of rainy day fund monies, while its B for transparency reflects basic adherence to best practices save for its lack of disclosure of costs to replace depreciated infrastructure. Maryland’s A in budget forecasting reflects its adherence to best practices for the most part, including the use of long-term expenditure and revenue estimates.
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 found here contain grades of the state's budgetary practices during the fiscal years of 2015 through 2017. Each state received marks in five critical categories, based on their adherence to best practices in several key budgeting indicators. The five categories covered methods used to achieve budgetary balance as well as how budgets and other financial information are disclosed to the public.
States received grades of A to D-minus (there are no “failed states”) for their procedures in estimating revenues and expenditures; their use of one-time actions to balance budgets; how they oversee and use rainy day funds and other fiscal reserves; the adequacy of their funding of public worker retirement and other postemployment benefits; and the quality of transparency of budget and related financial information. The grades are based on research conducted by public finance and budgeting professors and students at eleven US schools of public administration or policy. The universities’ research efforts were augmented by Volcker Alliance staff, data consultants at Municipal Market Analytics, and special project consultants Katherine Barrett and Richard Greene.
State Budget Sources
State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses is a resource published by the Volcker Alliance designed to help public officials, policy advocates, journalists, academics, and concerned citizens fully understand the critical fiscal decisions that governors and legislators must make. The guide includes the links below to budgets for this state as well as legislative analyses of budget bills and treasurers’ or comptrollers’ monthly state cash-flow statements; capital spending plans; reports on public-worker pension funding and returns; and reports by local and national fiscal research organizations, bond rating firms, and associations of state fiscal and finance officials.