Budget Spring Cleaning

By Jason Mercier, Evergreen Freedom Foundation

Spring is definitely in the air. Along with the return of the sun comes the annual ritual of re-organizing our lives to reflect the new hope that seems to bud with each brightening day. While the return of the sun may be shocking enough, something more amazing may be returning this spring as well, fiscal common sense.

Having ultimately punted on this past budget, assuring that a deficit bow wave exceeding a billion dollars await us next biennium, it appeared that those in the know were setting the state up for a major tax increase. While that possibility still looms ominously, with even not so silent whispers of an income tax being discussed, the first hints of budget sanity have finally appeared.

While we were sending in our tax returns on April 15, the Office of Financial Management (OFM) sent out a memo to state agency budget officers laying out the ground work for the possible return of accountability to the budget process.

In a memo entitled “Activity Inventory Spring 2002 Update,” OFM sought improvements in agency reporting to answer the question, “On behalf of the state’s citizens, we basically want to know, ‘What do you do? For whom? Why is it valuable?’”

This is the type of question we all have been asking, and the answer to it holds the key to our budget problems and solutions. Currently all agencies are required to report their activities to OFM to assist policy makers in their budget decisions. Unfortunately, the information provided to date has not been satisfactory to answer the questions OFM has asked. Realizing that the current budget solved nothing, and that the state was staring at a coming billion-dollar-plus-deficit, OFM issued new instructions to agencies to ensure that the next round of agency activity summaries would be sufficient to prioritize programs and make informed decisions.

Among the changes OFM is requesting:

• adding expected outcomes or outputs descriptions to each agency activity,
• requiring the associated budget description number be listed with each activity (matching programs up with their budget identification),
• a note indicating whether the activity is required by state or federal law.

These changes, along with the current requirement to report the number of full-time equivalents (FTEs) and expenditures per activity will allow the budget writers, the legislature and the public to determine if the program offered is a core function of government. These changes, if implemented appropriately, could be the first steps toward true performance budgeting and accountability.

Unconditional praise will have to wait until OFM’s request becomes reality. The tax increase threat still looms large, but for the first time this budget cycle, it appears that some in government are seriously looking toward addressing the spending side of the budget equation instead of blaming taxpayers for the deficit.

Activity Inventory Spring 2002 Update

Jason Mercier is a budget research analyst for the Olympia-based Evergreen Freedom Foundation. He can be reached at (360) 956-3482 or jmercier@effwa.org.

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org