State Budget Practice Report Cards and Budget Resource Guide

Utah earned straight A’s in three of the five categories of budgetary practices evaluated by the Volcker Alliance for fiscal 2015 through 2017. Only three other states—California, Hawaii, and Idaho—collected as many top averages. Utah won the high mark in budget maneuvers, reserve funds, and legacy costs, while recording C’s in budget forecasting and transparency.

In the budget maneuvers area, Utah avoided one-time measures such as deferring recurring expenditures, shifting revenues or costs, funding recurring expenditures with debt, or using asset sales and up-front revenues to achieve balance. The showing in reserve funds reflected the state’s record of establishing policies for disbursing and replenishing rainy day monies and its tying those reserves to the volatility of state revenues—a mandate since 2014.

Utah’s A for legacy costs covers its handling of public worker pensions and other postemployment benefits (OPEB), principally health care. After the pension fund suffered billions of dollars in losses during the financial crisis of 2007 through 2009, the state passed legislation in 2010 closing the system to new employees and instead offering them a choice of a defined contribution plan or a hybrid of that and defined benefits. In the three years studied, Utah made actuarially recommended contributions for pensions and OPEB.

The budget forecasting grade was diminished by Utah’s failure to provide multiyear expenditure or revenue forecasts, while the transparency grade suffered from its skimpy disclosure of tax expenditures. The Utah State Tax Commission published estimates of statutory sales tax exemptions, but not a more comprehensive report.

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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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