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.
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.