State Budget Practice Report Cards and Budget Resource Guide

Delaware’s decision in 2018 to release its first five-year general fund expenditure estimate helped the state raise its three-year average grade in budget forecasting to a top A for 2017 through 2019 from B in the previous three-year period. While Delaware had already produced long-term revenue estimates, it forecast expenditures for only one year before the change. Having long-term revenue and expenditure estimates makes it easier to plot budgets for several years.

The state received a C average in legacy costs, which cover public worker pensions and other postemployment benefits (OPEB), principally health care. The public worker pension was 85 percent funded as of 2018, 15 percentage points above the total for all states. Delaware’s grade was held down by OPEB underfunding. As of June 30, 2018, the state and other participating public employers had a net OPEB liability of $8.2 billion—almost twice the size of the general fund as of fiscal 2019.

Delaware scored a B average in reserve funds. While the size of its Budget Reserve Account lacks a tie to historical revenue volatility, state rainy day fund policies otherwise align with best practices cited in the recent Volcker Alliance working paper, Rainy Day Fund Strategies: A Call to Action

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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 presented here are taken from the 2020 Volcker Alliance report, Truth and Integrity in State Budgeting: The Balancing Act, which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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