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. 

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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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