State Budget Practice Report Cards and Budget Resource Guide
Arkansas was the only state to receive a D average, the second-lowest possible mark, in transparency for fiscal 2016 through 2018 (no state received a D-minus). Its shortcomings are numerous: The state lacks a consolidated website containing budget and other financial information essential in developing and analyzing its biennial spending plan. Arkansas also does not publish a capital budget, although some information about capital expenditures can be obtained from individual appropriations bills or the state’s transparency website. And like most states, Arkansas fails to disseminate information on deferred infrastructure maintenance liabilities.
The state also fared poorly in budget forecasting, with an average grade of D—the same as eight other states. Arkansas lacks consensus revenue forecasts, as well as multiyear expenditure and revenue estimates. The only forecasting area in which the state does well is in providing justification for short-term revenue growth projections.
Despite its weaknesses in forecasting expenditures and revenues, Arkansas was among sixteen states to achieve a top A average in the budget maneuvers category by regularly matching annual recurring expenditures and revenues.
Arkansas had a three-year average of C in reserve funds. The state has policies for disbursements from the rainy day fund but no policy for replenishing it. Decisions about depositing into the fund are left to the legislature, with no rules or statutory guidance
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.