State Budget Practice Report Cards and Budget Resource Guide

Maine, the poorest of the New England states based on median household income, was the only state to achieve a B average for fiscal 2016 through 2018 in all five budgetary categories: budget forecasting, budget maneuvers, legacy costs, reserve funds, and transparency.

In reserve funds and transparency, Maine has the same opportunities for improvement that most states have. Though the state has solid policies for disbursing and using money in its Budget Stabilization Fund, it has not linked reserve fund policies to revenue volatility—a practice employed by nineteen states in 2018. The transparency of the state’s finances would benefit from disclosing the costs of deferred infrastructure replacement, a practice that only Alaska, California, Hawaii, and Tennessee followed in 2017 and 2018.

Maine would have scored better in budget maneuvers if it had fully funded its general purpose aid for local schools. But it shortchanged the schools and required local districts to cover some of the costs that ostensibly belonged to the state.

Maine could improve its budget forecasting by disclosing expenditure projections over three years or more. While the state has four-year revenue estimates, the governor’s budget gives spending projections for just two years.

Download Printable State Report Card

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 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis 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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