State Budget Practice Report Cards and Budget Resource Guide
Virginia’s decision to make actuarially determined contributions to public worker pensions beginning in 2018 helped raise its average in legacy costs to C for fiscal 2017 through 2019 from D in the previous evaluation period.
The higher contributions, on top of other reforms enacted over the past decade, powered an increase in Virginia’s pension funding level to 79 percent in 2018, 7 percentage points above its 2016 level and about 9 points above the total for all states. While the state comes close to fully funding most of its other postemployment benefits (OPEB), its pre-Medicare retiree health care plan is run on a pay-as-you-go basis and does not meet actuarial goals.
Virginia fared better in budget forecasting, in which it was one of only twelve states receiving a top A average. Each year, the governor submits an estimate of revenues and a six-year revenue projection for the general fund and other major funds, including transportation. The estimate reflects input from two advisory organizations representing the business community, economists, tax experts, and legislators. The Joint Advisory Board of Economists evaluates economic assumptions and econometric methodology, as well as data from the state Department of Taxation. The Governor’s Advisory Council on Revenue Estimates reviews the economic assumptions and state business climate and produces revenue projection recommendations. Virginia also averaged an A in reserve funds.
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.