State Budget Practice Report Cards and Budget Resource Guide

Oklahoma was one of only four states to earn no lower than a B average in all five evaluated budgetary categories for fiscal 2017 through 2019. The other three were Maine, South Dakota, and West Virginia.

Oklahoma received top A averages in reserve funds and legacy costs, which cover public employee pensions and other postemployment benefits (OPEB), particularly health care. Since 2012, the state has contributed more to pensions annually than the actuarially determined amounts—a dramatic change from past underfunding. Oklahoma’s pension was 81 percent funded in 2018, 11 percentage points above the total for all states and 9 points above its 2016 level.

Its A average in reserve funds reflects an Oklahoma constitutional requirement that revenue collections exceeding general fund estimates be deposited into the rainy day fund until it reaches 15 percent of the prior fiscal year’s general revenue fund balance. This ensures that revenue windfalls will be set aside, helping smooth out the impact of volatility. The policy for emergency disbursements follows best practices cited in the recent Volcker Alliance working paper, Rainy Day Fund Strategies: A Call to Action.

Oklahoma earned B averages in budget forecasting, budget maneuvers, and transparency. The last grade suffered from the state’s absence of budgetary disclosure of costs of deferred maintenance infrastructure, a shortcoming shared by forty-four other states as of 2019. In budget forecasting, Oklahoma missed making an A because it did not provide a reasonable, detailed rationale to support revenue growth projections in budget documents.

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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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