State Budget Practice Report Cards and Budget Resource Guide
Alaska was one of only four states—the other three are Hawaii, Tennessee, and California—to disclose the costs of deferred infrastructure replacement in 2018. That disclosure helped Alaska garner an average grade of A in the transparency category for fiscal 2016 through 2018, even as it grappled with a deferred infrastructure replacement backlog of $1.9 billion for 2,200 facilities as of January 2018, according to the state’s Legislative Finance Division.
With an economy dependent on fluctuating revenues for oil and natural gas production, Alaska used a variety of one-time actions to balance budgets in the three years examined, leaving it with an average grade of C in budget maneuvers. In fiscal 2018, for example, the state deferred recurring expenditures and shifted a total of $2.5 billion into the general fund from the Statutory Budget Reserve and the Constitutional Budget Reserve funds.
In contrast to its mark for budget maneuvers, Alaska was one of seventeen states receiving an average grade of A in the reserve fund category for the three years studied. The Constitutional Budget Reserve Fund is governed by clear rules concerning disbursements and replenishments. Alaska was also among the nineteen states that tied goals for reserve funds to historical revenue volatility in 2018.
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 2016 through 2018. 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 eight 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.