Rhode Island

State Budget Practice Report Cards and Budget Resource Guide

Rhode Island is one of only a dozen states to get a top three-year average of A in budget forecasting for fiscal 2017 through 2019—a result of its detailed and transparent estimation procedures. The Revenue Estimating Conference, composed of the state budget officer and fiscal advisers to the House and Senate, revises current-year revenue estimates and provides a figure on which the upcoming budget is based. Rhode Island law prohibits spending beyond the agreed-upon revenue number.

The conference contracts with outside experts to provide longer-term economic forecasts, and the Rhode Island Budget Office is required by statute to prepare five-year projections of revenues and expenditures and submit them with budget documents. 

Rhode Island’s lowest average grade for the three-year period was a C in budget maneuvers, as it used one-time measures to keep the budget balanced. These included a 75-day tax amnesty program in fiscal 2018 that added $22 million to the general fund. The state also transferred $29 million from special funds to the general fund that year, including $6 million from the Rhode Island Health and Educational Building Corporation and $5 million from the Narragansett Bay Commission. 

In the remaining three categories—legacy costs, reserve funds, and transparency—Rhode Island posted B averages. In legacy costs, which cover public worker pensions and other postemployment benefits (OPEB), mainly health care, the state received credit for contributing annually to both obligations in line with amounts recommended by actuaries. But the pension is funded at only 55 percent in 2018, 15 percentage points below the total for all states. 

Download Printable State Report Card

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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