State Budget Practice Report Cards and Budget Resource Guide
Pennsylvania has a history of enacting late budgets riddled with one-time actions to achieve balance. Even though the state’s 2019 spending plan was passed a week before the start of the new fiscal year, timeliness didn’t yield a higher grade in the budget maneuvers category. For fiscal 2017 through 2019, the state averaged a D-minus, the lowest possible mark. It was faulted for balancing budgets by deferring recurring expenditures, shifting revenues and costs, funding recurring expenditures with debt, and using asset sales and upfront revenues to offset continuing spending.
The state maintained a C average in reserve funds, primarily because of rules governing deposits into and withdrawals from the rainy day fund. Still, as of June 30, 2019—the end of the fiscal year—Pennsylvania had a rainy day fund balance of only $22.5 million. (Nine days later, the governor’s office announced a $317 million deposit.)
In legacy costs, Pennsylvania posted a D average, the second-lowest mark possible. Though it provided full actuarially determined contributions for public worker pensions, its funding level of 55 percent—about 15 percentage points below the total for all states—reflected past contribution shortfalls. The state did not provide actuarially determined funding for other postemployment benefits (OPEB), such as retiree health care, during the evaluation period.
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 found here contain grades of the state's budgetary practices during the fiscal years of 2017 through 2019. Each state received marks in five critical categories, based on their adherence to best practices in several key budgeting indicators. The five categories covered methods used to achieve budgetary balance as well as how budgets and other financial information are disclosed to the public.
States received grades of A to D-minus (there are no “failed states”) for their procedures in estimating revenues and expenditures; their use of one-time actions to balance budgets; how they oversee and use rainy day funds and other fiscal reserves; the adequacy of their funding of public worker retirement and other postemployment benefits; and the quality of transparency of budget and related financial information. The grades are based on research conducted by public finance and budgeting professors and students at eight US schools of public administration or policy. The universities’ research efforts were augmented by Volcker Alliance staff, data consultants at Municipal Market Analytics, and special project consultants Katherine Barrett and Richard Greene.
State Budget Sources
State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses is a resource published by the Volcker Alliance designed to help public officials, policy advocates, journalists, academics, and concerned citizens fully understand the critical fiscal decisions that governors and legislators must make. The guide includes the links below to budgets for this state as well as legislative analyses of budget bills and treasurers’ or comptrollers’ monthly state cash-flow statements; capital spending plans; reports on public-worker pension funding and returns; and reports by local and national fiscal research organizations, bond rating firms, and associations of state fiscal and finance officials.