State Budget Practice Report Cards and Budget Resource Guide
New Hampshire gives less attention than many other states to budget forecasting, one of five budgetary categories evaluated by the Volcker Alliance for fiscal 2015 through 2017. The state recorded an average of D, the second-lowest grade possible, for the period in that area.
The grade was affected in part by the state’s lack of consensus revenue forecasts. Although consensus estimating—a best practice—isn’t necessarily more accurate than budget forecasts produced by the executive branch, the process goes far more smoothly when all parties involved in forming a budget agree on a single revenue figure. In addition, New Hampshire lacks mechanisms to create and disclose multiyear expenditure and revenue forecasts.
The state also earned a D average for its handling of legacy costs, which include public worker pensions and other postemployment benefits (OPEB), primarily health care. Its weakness in this area largely stems from not funding OPEB in line with actuarial recommendations. Though New Hampshire made its actuarially recommended contributions for pension funds in the three years studied, it still has just 66 percent of the assets needed to meet obligations.
The state won an average A for its efforts to avoid using one-time budget maneuvers, such as deferring recurring expenditures or shifting revenues and costs. In 2015, it transferred assets from the New Hampshire Turnpike System to the Highway Fund. It didn’t repeat that move in subsequent years, however, which resulted in A grades in the category in 2016 and 2017.
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.