West Virginia

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. 

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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 presented here are taken from the 2020 Volcker Alliance report, Truth and Integrity in State Budgeting: The Balancing Act, which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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