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.
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.