Rhode Island

State Budget Practice Report Cards and Budget Resource Guide

Rhode Island, the nation’s smallest state by land area, received at least B averages in all five budgetary categories evaluated by the Volcker Alliance for fiscal 2015 through 2017. Its best grade was for budget forecasting, in which Rhode Island was one of just nine states to post an overall A.

The state’s Revenue Estimating Conference, which includes representatives of the executive branch and of both legislative houses, typically issues consensus reports twice annually that present revenue estimates for the current fiscal year and the next four years. The reports are posted on the Office of Management and Budget website and used by the governor and when constructing budgets. Such consensus forecasts are a best practice that can allow governors and legislators to agree in advance on anticipated revenues and focus on expenditures during the budget debate. Rhode Island also follows best practices in its use of long-term revenue and expenditure forecasts.

The state’s pension funding ratio—the retirement system’s assets relative to its obligations—was just 57 percent in 2015, versus an average of 72 percent for all states. Still, Rhode Island earned consistent B’s for legacy costs by making the contributions actuaries recommended for public worker pensions and other postemployment benefits, principally retiree health care. It also received straight B’s in reserve funds, losing credit for not tying them to revenue volatility, and in transparency, because it doesn’t disclose deferred infrastructure replacement costs. Only Alaska and California disclose that data.

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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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