State Budget Practice Report Cards and Budget Resource Guide
Maine earned B averages for fiscal 2015 through 2019 in all five budget categories. Its most notable improvement over the period was in legacy costs, which includes public worker pensions and other postemployment benefits (OPEB), primarily health care. Maine started making actuarially determined OPEB contributions in 2017 and exceeded the actuarial sum by $9.4 million in 2018. The actions contrast with the twenty-seven states that failed to provide actuarial OPEB funding. Also helping the grade was Maine’s 84 percent pension funding ratio in 2019, 13 percentage points above the total for all states.
The budget forecasting grade was buoyed by the state’s use of a consensus revenue forecasting process, multiyear revenue forecasts, and detailed explanations of revenue growth projections. It missed a top A mark by failing to provide multiyear expenditure forecasts.
The B average for reserve funds reflected the disbursement and replenishment policies for Maine’s Budget Stabilization Fund. The account grew steadily over the study period and contained $309 million in 2019, equivalent to 8.3 percent of general fund expenditures. The state missed getting an A because it did not tie its reserves to revenue volatility, a practice followed by twenty 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.