New York

State Budget Practice Report Cards and Budget Resource Guide

New York received grades that place it in the top half of the fifty states in four of the five budget categories evaluated by the Volcker Alliance. In the fifth category, budget maneuvers, the state’s score fell from a C in 2015 to a D in 2016 and to the lowest possible, D-minus, in 2017. The state received a D average in the category.

The use of up-front proceeds to fund recurring expenditures is partly to blame for New York’s decline and overall low grade in the area for the three years examined. For example, the state used one-time licensing fees for casinos received in fiscal 2016 to pay for school aid in fiscal 2017. In addition, it has repeatedly shifted revenues and costs from year to year to keep budgets in balance and has regularly funded recurring expenditures with debt.

On the rest of its report card, New York earned one overall grade of A and three B’s. Its use of detailed explanations for anticipated changes in revenues helped earn the state an A average in budget forecasting. For instance, the  Economic and Revenue Outlook for fiscal 2017, prepared during the previous fiscal year, noted that 2016 state tax receipts were estimated to have expanded 5.7 percent for several reasons, including strong growth from a low prior-year base that was influenced by changes to federal tax law in 2013.

The B grades were in legacy costs, reserve funds, and transparency. New York’s grade in the first of those three areas was helped by its pension funding level of 98 percent, 26 percentage points above the average for all states in 2015. In reserve funds, the grade was affected by policymakers’ not tying contributions and balances to revenue volatility.

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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