State Budget Practice Report Cards and Budget Resource Guide
Over decades, Connecticut has dug itself into a pension hole that left it with a D average in legacy costs for fiscal 2016 through 2018, the second-lowest mark possible, even though the state contributed close to 100 percent of the actuarially recommended amount to the public employee retirement system.
Because of chronic underfunding in past years, Connecticut’s pension funding level was only 43.8 percent as of 2017, almost 25 percentage points lower than the total for US states. Only Illinois, Kentucky, and New Jersey had lower levels. A lack of actuarially determined annual funding for other postemployment benefits, principally health care, also contributed to Connecticut’s poor showing in legacy costs.
Digging out will be particularly difficult for Connecticut: Its total revenues dropped slightly in fiscal 2018 (while most other states’ revenues were on the upswing). As a result, the state has relied on one-time budget maneuvers, which earned it a D in the category for 2018 and a C average for the three years examined. Connecticut also relied on one-time revenues from a tax amnesty program to balance its 2018 budget.
Connecticut’s best performance was in budget forecasting, in which it received straight As. The state relies on consensus revenue forecasting—a best practice identified by the Volcker Alliance. It produces multiyear expenditure and revenue forecasts and also provides evidence to support revenue estimates.
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.