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.
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 2017 through 2019. 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.