State Budget Practice Report Cards and Budget Resource Guide

Missouri’s budgetary grades from the Volcker Alliance span the highest to the lowest. In 2017, for example, the state earned an A in budget maneuvers by avoiding one-time revenues, borrowings, asset sales, and similar techniques, but it got a D-minus in budget forecasting.

The disparity was almost as wide over all three years studied, fiscal 2015 through 2017. Missouri’s reserve fund practices received a B grade for largely hewing to best practices, save for its not linking reserves to historical revenue volatility. Even so, its ample fund balances may help Missouri cope with unexpected revenue challenges. According to the state’s comprehensive annual financial report for the fiscal year ended March 31, 2016, Missouri had about $1.8 billion on hand in its rainy day funds.

The state’s D-minus for budget forecasting in 2015 and 2017 and its three-year average of D reflect a failure to project expenditures or revenues for multiple years. Not doing so can make it difficult to discern possible fiscal imbalances in the future. For example, estimates of the impact of a 2014 tax cut on Missouri’s 2018 revenues remained undisclosed in fiscal 2017 budget documents as of October 31, 2016, the cutoff date for research on that year.

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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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