New York

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.

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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 presented here are taken from the 2020 Volcker Alliance report, Truth and Integrity in State Budgeting: The Balancing Act, which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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