State Budget Practice Report Cards and Budget Resource Guide

Unlike many states, Georgia has funded its public employee pensions in line with actuaries’ recommendations for at least two decades. Its budgetary commitment to full funding helped the state average an A in legacy costs—which include pensions and other postemployment benefits (OPEB), principally health care—for fiscal 2017 through 2019. 

Georgia’s pensions were funded at about 80 percent of estimated obligations in 2018, 10 percentage points above the total for all states. The state’s decision to start making full actuarially determined OPEB contributions also factored into its top mark in legacy costs; not doing so in 2016 had restricted its grade in the category to B for the previous three-year evaluation period.

In contrast to its performance in the legacy costs category, Georgia averaged a C in budget forecasting. The grade reflected the state’s failure to use the consensus method for revenue forecasting. Instead, estimates come from the executive branch via the state economist, who works with the governor and the executive Office of Planning and Budget. In addition, the state does not provide a detailed rationale to support revenue growth projections in the budget.

 Despite these shortcomings, Georgia estimates expenditures for four years beyond the current fiscal year—in contrast to many states that look ahead for no more than three years. Georgia’s forecast also includes a brief narrative in the governor’s budget report explaining the basis of the estimate. 

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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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