The Volcker Alliance, building off prior work by the State Budget Crisis Task Force, has released a preliminary report studying fiscal practices at the state-government level. The report, Truth and Integrity in State Budgeting: Lessons from Three States, examines three states — California, New Jersey, and Virginia — to learn if their budgetary practices were responding to the revenue growth provided by a recovering national economy.

Even as the revenue of state governments in the United States recovers from the longest economic downturn since the 1930s, many states continue to balance their budgets using accounting and other practices that obscure rather than clarify spending choices. These practices make budget trade-offs indecipherable, lead to poorly informed policymaking, pass current government costs on to future generations, and limit future spending options. Further, they weaken the fiscal capacity of states to support the cities and counties that depend on their aid. A primary aim of this preliminary study is to lay the groundwork for a common approach toward responsible budget practices in all 50 states.