State Budget Practice Report Cards and Budget Resource Guide
Missouri is a study in contrasts. Though it got the lowest possible average grade of D-minus in budget forecasting for fiscal 2015 through 2019, it also earned a top A average in budget maneuvers by avoiding the use of one-time measures to achieve balance. It is the only state to have such an extreme gap in grades in these two categories.
Only two other states—Alabama and North Dakota—did as poorly as Missouri in budget forecasting. While it produced revenue forecasts via the consensus method in 2016 and 2019, it failed to do so in the other years studied. In 2017 and 2018, for example, the governor and legislature declined to accept figures produced by executive and legislative branch experts and University of Missouri representatives. The state also consistently failed to issue long-term revenue and expenditure estimates, with projections covering only one fiscal year beyond the budget period.
The state scored a B average in reserve funds, missing an A because its rainy day fund policies failed to consider the volatility of the state’s revenues, a practice that was in place in twenty states in 2019. Missouri added small amounts to its Budget Reserve Fund each year. It held $651 million in 2019, equivalent to 6.8 percent of general fund expenditures.
Missouri averaged a C in legacy costs, a category including public worker pensions and other postemployment benefits (OPEB), primarily health care. The mark reflected a failure to fund OPEB in line with actuarially determined contributions. The state has steadily provided annual contributions for pensions in line with actuaries’ determinations, however, and its pension funding ratio was 78 percent in 2019, 7 percentage points above the total for all 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.