Glasgall, Winn-Ritzenberg Bring Truth and Integrity to Wall Street

Thursday, March 21, 2019

Bill Glasgall, the Alliance’s director of state and local initiatives, and Noah Winn-Ritzenberg, state and local project manager, have been making the rounds of Wall Street to discuss their program’s latest report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis. Since January, Bill and Noah have met in New York with the public finance teams at the credit rating firms Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service as well as executives from Build America Mutual Assurance, an insurer of bonds issued by US states and municipalities. A presentation to public finance experts at S&P Global is scheduled for May as well as a separate one, in Cambridge, Massachusetts, to a conference on New England fiscal and economic issues sponsored by the Lincoln Institute of Land Policy and the Federal Reserve Bank of Boston.

“We are gratified that Truth and Integrity’s grades and recommendations for best budgetary practices generate such keen interest among governors, legislators, analysts, and investors,” said Glasgall. "As was the case last year, we hope to see our work continue to be reflected in reform legislation in critical areas.”

In their recent presentations, Bill and Noah focused on the Volcker Alliance’s exclusive grades for budget processes in all fifty states, with individual marks for budget forecasting; budget maneuvers; legacy costs; reserve funds; and transparency. States received average grades of A to D-minus in each category for fiscal 2016 through 2018 as well as for each individual year studied.

Bill and Noah pointed out that only three states—California, Idaho, and Utah—received as many as three average A grades for the period, while 33 states showed moderate to severe stress in the category of legacy costs, including public employee pensions and postretirement benefits such as health care. Noah also analyzed the relationship between Volcker Alliance budget grades and credit ratings on state general obligation bonds, observing that in some cases the grades may provide early warnings of fiscal pressures not immediately apparent in credit scores. 

In addition to the discussions with credit rating firms and Build America, Bill has presented on Truth and Integrity in State Budgeting in recent weeks to conferences held by the Bond Buyer newspaper and the Citizens Budget Commission of New York. The Alliance’s D grade for Illinois’s reserve fund policy, meanwhile, was highlighted in Governor J.B. Pritzker’s proposed fiscal 2020 budget, which included reforms based on recommended best practices contained in the 2018 Truth and Integrity study. The Civic Committee of the Commercial Club of Chicago also based a recent analysis of Illinois’s budgetary challenges on grades and recommendations published by the Alliance.

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