State Budget Practice Report Cards and Budget Resource Guide

Oklahoma was one of only eight states receiving a top A average in legacy costs for fiscal 2016 through 2018. Unlike neighboring Texas, which posted a D-minus in the category, Oklahoma has made at least 100 percent of the actuarially determined contribution to its public worker pension plans since 2014. 

It also earned an A average in reserve funds. Oklahoma has a constitutional mandate governing the replenishment of the rainy day fund. It requires that collections exceeding the Board of Equalization’s itemized estimate of general revenues be deposited into the Constitutional Reserve Fund each year until the balance equals 15 percent of the prior fiscal year’s general fund. It also spells out how the reserve fund can be used. The board—an independent body—is made up of the governor, lieutenant governor, treasurer, and attorney general, and several other officials.

The state’s B average in budget maneuvers reflects repeated transfers of money into the general fund from special funds to create a balanced budget. For instance, the state moved $293 million into the general fund in 2018. Such one-time actions to cover recurring expenditures may not be sustainable.

Oklahoma also averaged a B in budget forecasting. While it used consensus revenue estimates and multiyear forecasts for revenues and expenditures, the state did not provide a rationale for its revenue growth projections. The legislature’s Appropriations Report and the state’s comprehensive annual financial report both say that revenue forecasts are adopted by the state Board of Equalization, but neither explains the forecasting process.

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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 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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