State Budget Practice Report Cards and Budget Resource Guide

Wisconsin is one of only ten states earning a top average A grade in legacy costs for fiscal 2017 through 2019. Its fully funded public worker pension—as of 2017—reflects the state’s long history of making actuaries’ annual recommended contributions. The state has minimal health benefit obligations for retirees and finances them on a pay-as-you-go basis.

In contrast, Wisconsin averaged a D, the second-lowest grade possible, in budget forecasting. It lacks consensus revenue estimates and relies exclusively on ones calculated by the state Department of Revenue, an executive branch agency, with no legislative input. Additionally, Wisconsin does not disclose long-term forecasts—those covering three years or more—for expenditures or revenues. 

The state earned B averages in budget transparency, reserve funds, and budget maneuvers. Like forty-four other states, a lack of disclosure of deferred infrastructure maintenance costs in budget documents prevented Wisconsin from earning a higher mark in transparency, while the absence of a link between the state’s rainy day fund and historical revenue volatility hurt its reserve funds grade. A pattern of refunding bonds to move payments into future years negatively affected the score in budget maneuvers, which tracks one-time actions used to achieve budgetary balance.

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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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