State Budget Practice Report Cards and Budget Resource Guide
West Virginia’s budgetary grades demonstrate how states can remediate poor practices. By reducing its use of one-time measures to achieve balance during the recovery from the Great Recession, West Virginia registered a B average in budget maneuvers for fiscal 2015 through 2019. The improvement reflected its curtailment of using debt to fund recurring expenditures in 2017.
The state also enhanced its performance in legacy costs—it averaged a B in the category—by coming close to funding other postemployment benefits (OPEB) for public employees, primarily health care, on an actuarially recommended basis. The state has a history of pension underfunding, particularly in the Teachers’ Retirement System. But it made actuarially determined contributions to its pension plans every year in the study period. This, in turn, led to an increase in its overall pension funding ratio, which rose from 72 percent in 2016 to 84 percent in 2019, 13 points above the total for all states.
West Virginia garnered B averages in the remaining three categories. In transparency, its grade suffered only from a failure to disclose deferred infrastructure maintenance costs in budget documents, an element also absent in forty-four other states. It missed an A in reserve funds because it lacks policies that connect funding of the Revenue Shortfall Reserve Fund with revenue volatility, a shortcoming it shares with twenty-nine other states. In budget forecasting, West Virginia fails to use consensus revenue forecasts, unlike twenty-nine states that have adopted the method.
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 2015 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.