Connecticut’s #1 When It Comes To Budgeting…

photo: Dakota County Clerk

…according to a recent Center on Budget and Policy Priorities national survey of state budgeting practices. Connecticut earned the top spot because it uses of most of the tools and methods that allow states to see the long-term consequences of their budgetary choices. “When state policymakers are writing the budget, they should be mindful of the future, not just the present,” the Center stated.

10 Key Budgeting Tools and Practices Looking to the Future 1. Multi-year Spending and Revenue Forecasts 2. Legislative Fiscal Notes with Multi-year Projections 3. Current Services Baseline Making Professional and Credible Projections 4. Independent Revenue Forecasts 5. Nonpartisan Fiscal Office 6. Periodic Independent Reviews of Pension Obligations Capacity to Make Mid-Course Corrections 7. Well-Designed Rainy Day Fund 8. Oversight and Evaluation of Statutory Tax Breaks (i.e., Tax Expenditures) 9. Standards for Meeting Pension and Debt Obligations 10. Regular, Professional-Prepared Spending and Revenue Projections

With that in mind, the Center graded the states on how well they have implemented 10 key budgetary tools and methods. The table to the right lists the 10 tools and methods, sorted according to the three general purposes budgets serve: (1) showing how spending and taxing decisions affect immediate and future fiscal health, (2) accurately comparing actual and projected spending and revenue, and (3) including a plan to handle spending overruns or revenue shortfalls. 

How did the Center rate and rank the states? It gave each state one point for each tool a state uses, and a half point for each tool it uses, but “in a way that needs significant improvement.” 

Hmmm… Connecticut scored 8.5. Where did it fall short? Connecticut lost a point because it does not have, according to the Center, an independent authority that regularly reviews the methods for determining future pension funding. It also lost a half point because it does not adequately assess the cost and benefits of different tax breaks. Rating and ranking states for different reasons appears to be a national public policy pastime, perhaps reflecting U.S. Supreme Court Justice Louis Brandeis’ observation that federalism lets “a single courageous state…if its citizens choose, serve as a laboratory and try novel social and economic experiments without risk to the rest of the country.” Still, as we learned in an earlier posting about studies ranking states based on their tax structure, it pays to read the fine print about a study’s scope and methodology. The Center weighed each tool equally, making no judgment about their relative value. Nor did it assess how well each state used its tools.