Truth and Integrity in Government Finance
The Truth and Integrity in Government Finance project is a multiyear study of state and local budgeting, financial reporting, and fiscal practices across the United States. The project builds on the work of the State Budget Crisis Task Force, chaired by Alliance founder Paul A. Volcker and Richard Ravitch, an Alliance director and, from 2011 to 2014, lieutenant governor of New York.
The project will analyze the budget practices of all 50 states, providing a firm basis for grading their budgeting performance and financial reporting in areas including clarity and integrity. The Alliance is collecting and analyzing data for this project in partnership with university partners and Municipal Market Analytics Inc., a leading independent financial consulting firm based in Concord, Massachusetts.
In its initial report, Truth and Integrity in State Budgeting: Lessons from Three States, issued in June 2015, the Alliance reviewed budgeting and financial reporting practices in California, New Jersey, and Virginia. It also established a preliminary set of reporting principles to better assure the clarity and integrity of financial practices in all states. Truth and Integrity includes a preliminary budget report card demonstrating how the three reviewed states were trending against a specific set of budget practices in 2013, 2014, and 2015.
Among the Alliance’s recommendations are improved budget transparency, including whether and how one-time sources are used to plug general fund deficits; better revenue forecasting and rainy day fund procedures; and disclosure of borrowing to cover budget gaps. As part of the project, the Alliance in 2015 released a working paper, Beyond the Basics: Best Practices in State Budget Transparency, and cosponsored two conferences on state and local fiscal transparency and stress with the Federal Reserve Banks of New York and Chicago.