State Budget Practice Report Cards and Budget Resource Guide
West Virginia averaged Bs in all five budget practice categories for fiscal 2017 through 2019. It was one of only four states to receive no average mark lower than a B.
In legacy costs, which cover public worker pensions and other postemployment benefits (OPEB), principally health care, West Virginia made its full actuarially determined contribution for pensions. The state funded OPEB in line with actuarial calculations in fiscal 2018 and 2019, though not in 2017. Pensions were 83 percent funded in 2018, almost 13 percentage points above the total for all states. Its mark in budget forecasting reflected West Virginia’s failure to use consensus revenue forecasts, which ensure that all parties involved in developing a budget agree to the same estimate. Instead, the governor’s office develops the revenue forecast with minimal legislative input.
Though West Virginia has policies for disbursing and replenishing reserve funds, it missed an A by failing to tie reserves to historical revenue volatility. That is among the best practices cited in the recent Volcker Alliance working paper, Rainy Day Fund Strategies: A Call to Action. The budget maneuvers grade stemmed from actions the state took in 2017 and 2018. They included transfers of special funds to the general fund and a debt refinancing in 2017 that traded lower current payments for higher costs in the future.
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.