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Budgeting for the Next Generation

Photo credit: Albert Cheung

News

California budget receives strong grades on forecasting and reserves practices, but the state falls short on pensions

December 12, 2018

 

The Volcker Alliance released its second annual report comparing state budgeting practices across all 50 U.S. states. The report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis, grades states on a scale of A to D- across five categories that measure their ability to maintain balanced and sustainable budgets.

As partners of the alliance, researchers at the Berkeley Institute for the Future of Young Americans (BIFYA) tracked California budgeting practices and found that the state is a strong performer in four of five budgeting categories, but continues to be weak in budgeting for legacy costs, specifically, pensions and retiree health care.

Read BIFYA's press release

Read the full report

 

About the Volcker Alliance Partnership

BIFYA's mission to create public policies that will invest in the next generation requires that we understand how young people fare in our current budget environment. To that end, we have partnered with The Volcker Alliance, a nonpartisan, nonprofit organization founded by former Federal Reserve Board Chairman Paul Volcker, to scrutinize state budgeting practices. Through this work, we have had the opportunity to weigh in on how state governments enact their budgets and how this may have important implications for younger generations, for example how states have chosen to deal with their public pension obligations. 

BIFYA has been contributing to the Volcker Alliance's Truth and Integrity in State Budgeting project, a 50-state analysis of state budgeting practices along several key metrics. The research is a collaborative effort with 11 other universities across the country. In November 2017, the Volcker Alliance release the first 50-state report which issued states grades from A to D-minus for their procedures in:

  • Estimating revenues and expenditures;
  • Using one-time actions to balance budgets;
  • Adequately funding their public worker retirement and other postemployment benefits;
  • Overseeing and using rainy day funds and other fiscal reserves;
  • And disclosing budget and related financial information.

More information about the Volcker Alliance and the Truth and Integrity in State Budgeting project can be found on the Volcker Alliance's website.