State Budget Practice Report Cards and Budget Resource Guide
Rhode Island’s budget forecasting procedures, which are among the nation’s most solid, earned the state a top A average in the category for fiscal 2016 through 2018. The state disclosed multiyear forecasts for expenditures and revenues, with further-looking estimates than those of most other states. Rhode Island’s Revenue Estimating Conference, composed of the governor’s budget officer and fiscal advisers to the house and senate, produces reports twice a year that contain forecasts for the current fiscal year and following four fiscal years, as well as the following five calendar years.
The state’s poorest performance was in budget maneuvers, where it scored a C average. It did not use debt to pay for recurring expenditures in 2018—a maneuver it had used in the previous two years—but that positive move was offset by the infusion of $12.5 million in one-time revenue from a tax amnesty program that ended in February 2018. Such one-time cash might not be available to cover future recurring expenditures.
Rhode Island averaged Bs in the reserve funds and transparency categories. It missed an A in the former because it did not link rainy day fund policies to revenue volatility, a best practice followed by nineteen states in 2018; and in the latter by failing to disclose deferred infrastructure replacement costs, a shortcoming of all but four states in 2017 and 2018.
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 2016 through 2018. 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.