State Budget Practice Report Cards and Budget Resource Guide
A robust set of practices for estimating current and longer-term revenues and expenditures is essential for helping states plan for contingencies and determine whether current policies risk putting budgets out of balance in future years. That is why the Volcker Alliance included forecasting in the five budgetary categories it evaluated for fiscal 2015 through 2017. Despite receiving high marks in several areas, Wisconsin fell short in forecasting, joining eight other states with an overall grade of D. Only Alabama, Illinois, Kansas, and North Dakota scored lower than Wisconsin and its peers; the three-year average for all states was B.
Wisconsin’s shortcomings included an absence of multiyear expenditure and revenue forecasts and of consensus revenue forecasts, a best practice designed to ensure that all major players build a budget based on the same revenue estimate. As happens in several other states, Wisconsin’s executive and legislative branches prepare separate revenue estimates, with the governor’s biennial budget proposal based solely on the executive branch’s forecast, prepared by the Department of Revenue. The Legislative Fiscal Bureau’s estimate is used by the Joint Committee on Finance when legislators debate and mark up the governor’s budget.
In contrast to its performance in forecasting, Wisconsin received straight A’s in legacy costs. The state’s pension plan has 98 percent of the assets needed to offset its obligations, 26 percentage points above the average for all states and tied with New York for the second-best funding ratio, behind South Dakota. Wisconsin also made the full contributions recommended by actuaries over the three years for public worker pension and other postemployment benefits, principally health care.
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.