State Budget Practice Report Cards and Budget Resource Guide
Maryland averaged an A in budget forecasting for 2017 through 2019, earning the top mark for using long-term revenue and expenditure estimates and consensus forecasting. Yet it fell far short during the period in the other four categories evaluated.
The state averaged a C in budget maneuvers, although its annual grade dropped to D in fiscal 2018 after an estimate of lower gaming revenues led Maryland to use bond premiums—a form of upfront revenue on financial transactions—to offset a $23.6 million appropriation for debt service. The state also deferred Medicaid spending and used a bond refinancing to lower debt service costs for the following three years. In addition, in fiscal 2018 and 2019, Maryland used annual surpluses to help support recurring general fund expenditures.
It received a B average in legacy costs. Maryland has made annual contributions for public worker pensions in line with actuarial recommendations since 2016, and its pension funding level rose from 65 percent that year to 70 percent in 2018, matching the total for all states. While annual funding of other postemployment benefits (OPEB), principally health care, met the actuarially determined annual amount in 2018 and 2019, it did not in the previous year.
Maryland’s C average in reserve funds for the latest period was the lowest of the eight states in the South Atlantic region. Six earned Bs, while Virginia posted an A. Maryland fails to tie its reserve fund levels to volatility and lacks effective policies for fund disbursements.
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.