State Budget Practice Report Cards and Budget Resource Guide
With its 94.5 percent pension funded ratio as of 2017, New York exceeded the overall level for states by about 26 percentage points. Only Wisconsin and South Dakota, with fully funded pensions, were in better shape. New York has been able to keep its ratio high by making its actuarially determined contribution for current and promised benefits each year.
Despite its record on pensions, New York garnered only a B average in legacy costs for fiscal 2016 through 2018 because it failed to fully fund its obligations for other postemployment benefits, chiefly health care. The unfunded actuarial accrued liability as of fiscal 2018 was $90.5 billion, including $72.8 billion for the state and $17.7 billion for the State University of New York.
The state scored even lower in budget maneuvers, receiving a D average, the second-lowest mark possible. Its deferral of recurring expenditures in 2018 contributed to the grade. The state borrowed $215 million from the New York Power Authority, a state-owned agency, in March 2009 and was supposed to repay the loan by September 30, 2017. But in fiscal 2017, it extended the payment plan to fiscal 2023. New York also borrowed $103 million from the authority in September 2009, with repayment scheduled by September 30, 2014. That was similarly extended, to installments stretching from fiscal 2015 to 2019.
In contrast, New York averaged a top mark of A in budget forecasting. It uses consensus revenue estimating, makes multiyear forecasts of revenues and expenditures, and produces clear explanations of the reasoning behind estimates of revenue growth. It received Bs in the reserve funds and transparency categories.
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.