State Budget Practice Report Cards and Budget Resource Guide

Although Ohio’s rainy day fund balance was the equivalent of a record high of 8.5 percent of general fund expenditures in fiscal 2018, the state received a C average in reserve funds for that year and the two previous years. The grade reflected the absence of a link between revenue volatility and reserve fund policies. The state also lacks rules governing withdrawals, although it does have policies for replenishment.

Ohio fared better in transparency, notching a B average for fiscal 2016 through 2018. A web-based interactive budget lets users click through a series of charts for information derived from the state’s accounting system, including the breakdown of nontax and tax revenues and the portion of the budget spent on debt service, personnel, and equipment. Ohio missed receiving an A because it does not disclose deferred infrastructure replacement costs, a shortcoming shared by all but four states—Alaska, California, Hawaii, and Tennessee in 2017 and 2018.

Ohio also averaged a B in the budget maneuvers category. The state avoided one-time measures such as deferring recurring expenditures and funding spending with debt. Still, like thirty-two other states in fiscal 2017, Ohio used cash from special funds to help achieve general fund balance. For example, that year $255 million was transferred to the general fund from other government funds, according to the state’s comprehensive annual financial report.

Ohio’s worst grade was a D average in budget forecasting. The state does not provide multiyear revenue or expenditure forecasts beyond the second year of its biennial budget. It also lacks a formal consensus process for revenue estimating. The Legislative Service Commission and the governor’s office prepare separate revenue estimates, often discussing the results informally. While legislators can choose between the forecasts, they have tended in recent years to accept the more conservative outlook or average the two.

Download Printable State Report Card

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 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis 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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