Minnesota

State Budget Practice Report Cards and Budget Resource Guide

Minnesota won straight A’s from the Volcker Alliance for fiscal 2015 through 2017 in the budget maneuvers and reserve funds categories. Earning the top grade reflected the state’s adherence to best practices in the use of rainy day funds and other fiscal reserves, as well as its consistent ability to avoid using budget maneuvers such as one-time revenues, borrowings, asset sales, or other measures to achieve short-term budgetary balance.

The state did less well in handling legacy costs, where it received a C average over the three years. Even though Minnesota’s funding of its pension plan is 80 percent of liabilities, annual state contributions to pension funds are based on a statutory formula that generally is less than fund actuaries’ recommendation. On average, state pensions in 2015 had 72 percent of the assets needed to meet obligations.

Although Minnesota received an average mark of B in transparency because it does not disclose deferred infrastructure replacement costs, its consolidated website was one of the best in the nation. The site, run by the Department of Management and Budget, contains documents covering budget processes; current and previous budgets; the governor’s original budget recommendations; budget and economic forecasts; revenue and economic updates; debt; and other budget-related analyses.

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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