State Budget Practice Report Cards and Budget Resource Guide
New Hampshire was one of sixteen states to earn an A average in budget maneuvers for fiscal 2016 through 2018. In doing so, it showed no evidence of deferring recurring expenditures or accelerating revenues, or using other one-time techniques to achieve budgetary balance.
That mark contrasts with the state’s low averages in the budget forecasting and legacy cost categories. In budget forecasting for 2018, New Hampshire received the lowest grade possible, a D-minus, along with Alabama, Missouri, and North Dakota. New Hampshire’s poor showing reflected a lack of information on how it derived its short-term projections of revenue growth. It also failed to employ other fundamental practices, including consensus revenue estimates and multiyear revenue and expenditure forecasts.
New Hampshire’s insufficient funding of other postemployment benefit costs for public workers, principally health care, contributed to its D average in legacy costs. The accrued liability for these benefits is $2.1 billion, equivalent to almost half of the state’s general fund budget in fiscal 2017. Although New Hampshire has fully funded its actuarially determined pension contributions in recent years, it often fell short in the past. Its pension funded ratio was only 62.6 percent as of 2017, almost six percentage points below 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 2016 through 2018. 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.