Rhode Island

State Budget Practice Report Cards and Budget Resource Guide

Rhode Island’s budget forecasting procedures, which are among the nation’s most solid, earned the state a top A average in the category for fiscal 2016 through 2018. The state disclosed multiyear forecasts for expenditures and revenues, with further-looking estimates than those of most other states. Rhode Island’s Revenue Estimating Conference, composed of the governor’s budget officer and fiscal advisers to the house and senate, produces reports twice a year that contain forecasts for the current fiscal year and following four fiscal years, as well as the following five calendar years. 

The state’s poorest performance was in budget maneuvers, where it scored a C average. It did not use debt to pay for recurring expenditures in 2018—a maneuver it had used in the previous two years—but that positive move was offset by the infusion of $12.5 million in one-time revenue from a tax amnesty program that ended in February 2018. Such one-time cash might not be available to cover future recurring expenditures.

Rhode Island averaged Bs in the reserve funds and transparency categories. It missed an A in the former because it did not link rainy day fund policies to revenue volatility, a best practice followed by nineteen states in 2018; and in the latter by failing to disclose deferred infrastructure replacement costs, a shortcoming of all but four states in 2017 and 2018.

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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 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis 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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