State Budget Practice Report Cards and Budget Resource Guide
Idaho won top A averages in budget maneuvers, reserve funds, and legacy costs for fiscal 2017 through 2019, enhancing its reputation for conservative budgeting practices. The state fell far short in one area, however, with a D average in budget forecasting. Only four states fared worse in the category.
Idaho’s low forecasting grade began with its failure to use consensus revenue estimates. Instead of estimates assembled jointly by the executive and legislative branches, revenue projections are based on the Idaho Economic Forecast, published quarterly by the Division of Financial Management, a unit of the governor’s office. The state also lacks multiyear forecasts of revenues or expenditures.
Idaho’s strong reserves afford it some protection against the fiscal risks of a short-term estimate. Its reserve policies parallel best practices cited in the recent Volcker Alliance working paper, Rainy Day Fund Strategies: A Call to Action. In addition to its Budget Stabilization Fund, which is supported by laws detailing appropriate times for deposits and withdrawals, Idaho carries large year-end general fund balances. As a result, its $530 million in rainy day fund assets—equivalent to about 14 percent of general fund revenues—were augmented by an estimated general fund balance of $121.9 million at the end of fiscal 2019. The state also ties rainy day fund deposits to historical revenue volatility and ensures that revenue growth in excess of 4 percent annually goes into the rainy day fund.
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 2017 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.