State Budget Practice Report Cards and Budget Resource Guide
Wisconsin was one of seven states that received a top A average in legacy costs for fiscal 2015 through 2019. Alongside South Dakota, it was one of only two with a fully funded public worker pension system in 2019.
The state’s 103 percent pension funding ratio in 2019 was the highest of any state. Over the five-year study period, Wisconsin’s annual pension funding met the actuarially determined contribution. Funding also benefits from the pension’s risk-sharing features, with investment performance influencing accrual rates, contributions, and retiree payments. Pensions are such a high priority that, since 1988, the state Legislative Council, which provides nonpartisan legal and policy advice, has taken the unusual step of examining pension liabilities of all states every other year. Wisconsin funds other postemployment benefits (OPEB), principally health care, on a pay-as-you-go basis. With a modest $431 million net OPEB liability as of December 31, 2018, compared with an $18 billion general fund budget, the policy did not hurt the state’s legacy costs grade.
A dramatic contrast is Wisconsin’s D average in budget forecasting. The state does not use a consensus revenue estimate, choosing instead to rely on the executive branch’s Department of Revenue to produce the official figure for each biennium. The state does not present multiyear revenue or expenditure estimates in the budget or related documents.
Wisconsin posted B averages in budget maneuvers, reserve funds, and transparency. In budget maneuvers, the state avoided deferring expenditures and shifting revenues and costs from 2016 through 2019, but it has consistently pushed debt payments to future years in bond refundings. In reserve funds, the Budget Stabilization Fund features policies for replenishments and disbursements, but the state does not consider revenue volatility in setting aside money for the rainy day account.
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.