Just a handful of days ago, the Volcker Alliance released its latest in a series of ground-breaking reports, titled “Truth and Integrity in State Budgeting: What is the Reality?” at a gathering in the Roosevelt House in New York City. This report, which covers all fifty states over the fiscal years of 2015 through 2017, focuses on five critical areas that explain methods used to achieve budgetary balance, as well as how budgets and other financial information are disclosed to the public. States were given grades of A to D-minus for their procedures in:
Estimating revenues and expenditures;
Using one-time actions to balance budgets;
Adequately funding their public worker retirement and other postemployment benefits;
Overseeing and using rainy day funds and other fiscal reserves;
Disclosing budget and related financial information.
As William Glasgall, director of the Volcker Alliance’s state and local program said, “With state revenue growth estimates being revised downward in 2017 and 2018 despite more than eight straight years of economic recovery, the pressure is great to balance budgets using one-time maneuvers or underfunding long term obligations for such areas as infrastructure, education and public employee retirement.
The press conference also featured commentary from Paul Volcker, the Alliance’s Chairman and former Federal Reserve Board Chairman, Richard Ravitch, an Alliance director and former Lieutenant Governor of New York and Thomas W. Ross, president of the Volcker Alliance.
The top graded states in Budget Forecasting included Connecticut, Florida, Hawaii, Maryland, New York and four others.
In the budget maneuvers category, the list of states least dependent on using resources from other years to pay the bills due this year was led by California, Delaware, Georgia, Hawaii, Idaho and sixteen others.
Legacy costs, like pensions and post retirement health care were given the highest marks in Idaho, Iowa, Nebraska, Oklahoma, Oregon and three others.
The evaluation of Reserve Funds found that Alaska, Arizona, California, Hawaii, Idaho and ten others did better than the remainder.
Finally, the category that covered transparency only had two states with the highest scores; Alaska and California. This was largely due to the fact that both of those states are making an effort to disclose deferred maintenance figures for their infrastructure.
The remainder of the core Volcker Team, working under the auspices of Glasgall, include Melissa Austin and Noah Winn-Ritzenberg.
Consultants to the report include Matt Fabian and Lisa Washburn of Municipal Market Analytics and Katherine Barrett and Richard Greene (us!) principals of Barrett and Greene, Inc.
For a film of the Roosevelt House event, click here.