Truth and Integrity in Government Finance
The Truth and Integrity in Government Finance initiative 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 initiative analyzes the budget practices of all 50 states annually, providing a firm basis for grading their budgeting performance and financial reporting in areas including clarity and integrity. The study is being conducted in partnership with a research team of more than fifty faculty and students from elevent universities.
In November 2017, the Alliance released Truth and Integrity in State Budgeting: What is the Reality?, with in-depth analysis and grading of the budget practices of all fifty states. The analysis is grounded in a broad set of best practices necessary for accurate, sustainable, and transparent budgeting by states. On June 28, 2018, the Alliance launched the interactive state budget Data Lab, making the data from Truth and Integrity in State Budgeting: What is the Reality? available for public use. The Data Lab aggregates and adapts the Alliance's research findings into a rich array of datasets and brings almost 4,000 data points to life through interactive charts and visual comparison tools. This provides elected officials, public employees, investors, policy advocates, and citizens with a reservoir of historical data from fiscal year 2015 through 2017 and will equip them with flexible research tools easily tailored by state, category, year, grade, or budget practice to help users across the U.S. determine and improve their state’s fiscal governance and sustainability.
The release of the Data Lab follows the rollout on January 30, 2018 of a more comprehensive set of two-page budget report cards for each of the fifty states. The report cards include a summary of the state’s performance in budget practices and a comparison of each state’s grades with those of other states in its US Census region. The can be accessed via an interactive map that takes users to additional information about each state’s budget process compiled in the Alliance's 2016 publication State Budget Sources: An Annotated Reference Guide to State Budgets, Financial Reports, and Fiscal Analyses.
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 included 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.