Sunday, April 14, 2024
Hawai'i Free Press

Current Articles | Archives

Saturday, January 12, 2019
Budget: Hawaii Scores 'D-' for Legacy Costs
By Selected News Articles @ 12:00 PM :: 3533 Views :: Hawaii State Government, Hawaii Statistics

Truth and Integrity in State Budgeting Preventing the Next Fiscal Crisis

From The Volker Alliance, December 12, 2018 (excerpts)

This report marks the Volcker Alliance’s second annual assessment of US state budget practices. Covering the fiscal years 2016, 2017, and 2018, the study grades states’ success in pursuing transparent and fiscally sustainable procedures as they estimate their revenues and expenditures and attempt to keep them in balance not only at the start of the fiscal year but as it progresses.

Because the US federal system is composed of fifty sovereign states, it is essential to assess and compare the quality of their budget practices against a common set of standards. As we did in the 2017 report, we gave states grades of A to D-minus, the lowest possible mark, for their practices in five areas that are the building blocks of budgeting nationwide:

  • budget forecasting, in which we evaluate how and whether states estimate revenues and expenditures for the coming fiscal year and the long term;
  • budget maneuvers, in which we gauge dependence on one-time actions to offset recurring expenditures;
  • legacy costs, in which we assess how well states are funding promises made to public employees to cover retirement costs, including pensions and retiree health care;
  • reserve funds, in which we examine the condition of general fund reserves as well as rainy day funds and rules governing their use and replenishment; and
  • budget transparency, in which we scrutinize disclosure of budget information, including debts, tax expenditures, and the estimated cost of deferred infrastructure maintenance.

In this report, we also compared states’ budgetary grades to marks given the year before and offer best practices in each of the five budget categories.

Grades awarded to states this year did not follow geographic patterns, and larger and smaller states were equally likely to score well or badly. Of the five smallest states by population, Alaska won an average A in transparency, South Dakota and Vermont received Bs, and North Dakota and Wyoming posted Cs. Grades also varied across categories within individual states. Hawaii, for example, received a D-minus in the legacy costs category, which covers pensions and other postemployment benefits, while earning an A for its work in budget forecasting.

The eight states receiving an average of A in legacy costs were Idaho, Iowa, Nebraska, Oklahoma, Oregon, South Dakota, Utah, and Wisconsin. Six states received the lowest possible grade of D-minus: Hawaii, Illinois, Massachusetts, New Jersey, Texas, and Wyoming. Each of these states failed to make their full ARC or ADC for both pension and OPEB in either 2017 or 2018.

For at least three decades, many states have followed a general rule that rainy day fund reserves should equal about 5 percent of the general fund balance. While the origins of this rule remain uncertain, it has become clear that it makes little sense to hold all fifty states to the same reserve standard without considering their individual revenue structures.

Largely due to advocacy efforts by the Pew Charitable Trusts, a growing number of states have acknowledged this issue and are tying their rainy day fund goals to the volatility of their revenue streams. Nineteen states follow this practice, thanks in part to recent legislative momentum. In 2017, Hawaii, Maryland, Montana, New Mexico, North Carolina, and North Dakota changed rainy day fund policies to increase their consideration of revenue volatility.

While federal standards for reporting highway and bridge deferred maintenance costs are being upgraded, Hawaii, which received a grade of B, and the three states receiving top average scores of A—Alaska, California, and Tennessee—are the only ones making a clear effort to disclose these costs in budgetary or related documents.…

read … Full Report 

Volker Alliance: Hawaii State Budget Practice Report Cards and Budget Resource Guide

 

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT