State Budget Practice Report Cards and Budget Resource Guide
Delaware’s revenue recovery trailed those of many other states in the later years of the recovery from the Great Recession. In fiscal 2019, for example, revenues rose by 4.5 percent versus the national average of 6.3 percent. Unlike some neighbors, however, Delaware was not tempted into using budget maneuvers to achieve balance. As a result, it was one of seventeen states to win a top A average in the category from fiscal 2015 through 2019.
Its avoidance of maneuvers was buttressed by the addition in 2018 of multiyear expenditure forecasts to budget documents, giving it a B average in budget forecasting. Its lowest average grade was a C in legacy costs, which include public worker pensions and other postemployment benefits (OPEB), primarily health care. The mark reflected the state’s practice of funding OPEB annually on a pay-as-you-go basis and not according to an actuarially determined amount. In contrast, Delaware’s pension was consistently funded in line with actuarial recommendations.
Delaware posted B averages in reserve funds and transparency. Its policies for using and replenishing the Budget Reserve Account helped the fund grow by small amounts in each year from 2015 through 2019, when it totaled $240 million, equivalent to 5.5 percent of general fund expenditures. Its shortcoming was a failure to link the fund to historical revenue volatility, an element also missing in twenty-nine other states. The transparency grade resulted from Delaware’s failure to report deferred infrastructure maintenance costs in budget documents, a shortcoming shared by forty-four other states.
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 2015 through 2019. 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.