State Budget Practice Report Cards and Budget Resource Guide
Washington scored A averages in budget forecasting, budget maneuvers, and reserve funds for fiscal 2017 through 2019. The only state receiving more top marks was Hawaii, which averaged an A in four of five categories.
Washington eschews the use of one-time revenues to achieve budgetary balance and has strong budget forecasting practices, with its Economic and Revenue Forecast Council updating revenue estimates four times annually. The council includes members of the legislative and executive branches, and the state treasurer. It produces long-term forecasts for revenues and expenditures that cover at least three years.
In reserve funds, Washington maintains policies that parallel best practices cited in the recent Volcker Alliance working paper, Rainy Day Fund Strategies: A Call to Action. Drawdowns from the Budget Stabilization Account are allowed only when the governor declares an emergency that threatens public safety or when state employment growth is forecast to be less than 1 percent in any fiscal year. Other uses require a vote of three-fifths of the members of each chamber of the legislature. The state constitution also requires the transfer of 1 percent of projected general revenues to the stabilization account at the beginning of each biennium.
Washington improved its legacy cost grade, which rose to a C average for the 2017–19 period from a D for 2016–18. The category covers public worker pensions and other postemployment benefits (OPEB), principally health care. Pensions were 94 percent funded in 2018, 24 percentage points above the total for all states. While statutory contributions for fiscal 2017 and 2018 fell short of actuaries’ recommendations, the annual employer contribution rates were updated in fiscal 2019 to provide slightly more than the actuarially determined contribution. But the state still lags in its annual payments for OPEB.
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.