State Budget Practice Report Cards and Budget Resource Guide
New Hampshire’s mix of B and D average grades for fiscal 2015 through 2019 reflects a state that carries out some budgetary practices relatively well and others poorly. Its D average in budget forecasting, for example, was driven partly by revenue and expenditure projections that failed to extend farther than the biennial budget. In 2018–19, New Hampshire also lacked explanatory information for its short-term revenue growth projections in the governor’s biennial executive budget summaries or the monthly revenue reports from the Department of Administrative Services.
The state’s D average in legacy costs, which include public worker pensions and other postemployment benefits (OPEB), primarily health care, shows a disparity in retirement funding practices. While New Hampshire made annual pension contributions on an actuarial basis, it did not do so for OPEB, which had a net liability of $1.8 billion as of June 30, 2019. That year, New Hampshire’s pension funding ratio was 66 percent, 5 percentage points below the total for all states.
In the remaining three categories, New Hampshire fared better. In budget maneuvers, it averaged B. While it avoided one-time actions to balance budgets in 2016–17, it used transfers from special funds in the following two years. In 2019, $146.3 million of New Hampshire Liquor Commission profits were used for general fund expenses.
New Hampshire’s B in reserve funds reflected its lack of consideration of revenue volatility in policies governing the Revenue Stabilization Reserve Account, a shortcoming shared with twenty-nine other states. That fund held $115 million in fiscal 2019, equivalent to 7.7 percent of general fund expenditures, up from $22 million, or 1.7 percent, in fiscal 2015.
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.