State Budget Practice Report Cards and Budget Resource Guide
New York’s average in budget maneuvers for fiscal 2017 through 2019 fell to a D-minus, the lowest possible grade, from D in the previous period as the state deferred recurring spending to achieve balance. In fiscal 2019, for example, New York delayed $42 million in scheduled Medicaid reimbursements. The move followed the deferral of an annual loan repayment to the New York Power Authority and extension of the loan term through 2023, which was estimated to save the state $193 million in fiscal 2018.
The state’s other budget maneuvers in the evaluation period included revenue and cost shifting, funding current expenditures with debt, and relying on the proposed sale of an asset to help balance the budget.
New York performed better in legacy costs, in which it averaged a B. Its pensions were 98 percent funded in 2018, the third-best level among states, after Wisconsin and South Dakota. It missed a top A in the category because it funds its other postemployment benefits (OPEB), principally health care, on a pay-as-you-go basis. That strategy left New York with an unfunded OPEB liability of $90.5 billion in fiscal 2018.
Its highest average was an A in budget forecasting. New York statutes require a three-year financial projection that includes receipts and disbursements. The projections provide explanations of the assumptions used and information about forecasts based on altered level of service.
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.