State Budget Practice Report Cards and Budget Resource Guide

Wisconsin was one of only two states—South Dakota was the other—to boast a 100 percent funded ratio for its public worker pension plan as of 2017. That, in addition to its full payment of actuarially determined contributions to pensions and other postemployment benefits, mainly health care, earned the state an A average in legacy costs for fiscal 2016 through 2018.

The state’s lowest grade was in forecasting, where it averaged a D. Wisconsin did not use consensus revenue forecasting but relied on the executive branch’s Department of Revenue to develop estimates used in the governor’s biennial budget. It also failed to provide multiyear revenue or expenditure forecasts in the budget, presenting numbers only for the current biennium.

Wisconsin earned straight B averages in the other three budgetary categories. In budget maneuvers, bond refinancings in 2017 and 2018 pushed out principal payments to later years, a practice that helps support current expenditures at the expense of future budgets. The state’s grade in reserve funds suffered from its failure to tie the level of fiscal reserves to revenue volatility, while its transparency mark reflected a lack of disclosure of deferred infrastructure replacement costs, a common weakness among states.

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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 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis 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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