POLICY HIGHLIGHTER

Volume 13, Number 30
November 18, 2003

Next step in priority-based budgeting

Washington lawmakers earned national headlines last year for implementing an innovative new priority-based budget model called “Priorities of Government.” With the new session fast approaching, legislators have an opportunity to build on their success by taking the next step; that is to include budgeting tools in the actual appropriations bill.

While many states are improving various parts of the budget process—such as the development of performance indicators and outcomes—few if any understand how to link all the parts together. Responsible budgeting requires a clear connection between core governing functions, agency mission statements, goals and objectives, performance measures, performance evaluation, and the budget-writing process itself.

Though most agencies currently provide their mission statements, goals and performance indicators to state budget-writers, they are not clearly spelled out in the final budget legislation. Instead, the budget simply lists an appropriation amount for each agency/program. Including a clear description of the purpose for dollars allocated in the actual bill allows for better, fairer program evaluation; it more firmly binds legislative intent; it makes the process more transparent and accessible.

Texas, Louisiana and New Mexico are already doing this. Because it’s a new concept, and because special interests have pressed hard for business as usual, some of the objectives still do not match the goals. Still, the proper tools are now out of the box and being used, even if some of the construction at these early stages looks a bit awkward. Simultaneously, legislators in those states and ours can fine tune or rework identified priorities and expected program results. Here are some examples of what’s being done.

TEXAS
Before listing the amount appropriated for K-12, the education budget passed by Texas legislators lists program goals, outcomes and strategies. Note how this works.

Texas Education Agency
Goal: To fulfill the promise for all Texas children, the Texas Education Agency will provide program leadership to the state public education system, ensuring all students achieve the state’s public education goals and objectives.

Outcome (Results/Impact)
Percent of students completing high school in 2004 - 94.2%; 2005 - 94.5%
Percent of African-American students completing high school in 2004 - 91.8%; 2005 - 91.8%
Percent of students with disabilities completing high school in 2004 - 91%; 2005 - 92%

Strategy
Plan and implement challenging academic, advanced academic, career and technology education, and bilingual/English as second language educational programs to ensure that all Texas students graduate from high school with a world-class education.

LOUISIANA
Louisiana’s budget not only describes each program and its objectives, but also lists the performance indicators and details the permitted number of government employees for the programs.

Debt Management - Authorized Positions (8)
Program Description: Provides staff for the State Bond Commission as the lead agency for management of state debt; monitors, regulates and coordinates state and local debt; is responsible for payment of debt service; provides assistance to state agencies, local governments, and public trusts with issuance of debt; and disseminates information to bond rating agencies and investors who purchase state bonds.

Objective
To ensure the State Bond Commission is provided the support services required to accomplish its constitutional mandates.

Performance Indicator
Percentage of State Bond Commission mandates not met due to insufficient support services - 0%

NEW MEXICO
Like Louisiana, New Mexico outlines how many government employees are authorized for the programs and lists the various performance measurements.

Corrections inmate management & control - Authorized FTEs (1,677); Permanent (18)
Program Description: The purpose of the inmate management and control program is to incarcerate offenders in a humane, professionally sound manner and to provide safe and secure prison operations. This includes quality hiring and in-service training of corrections officers, protecting the public from escape risks and protecting prison staff, contractors and inmates from violence to the extent possible within budgetary resources.

Performance measures
Outcome - Percent turnover of correctional officers - 18%
Efficiency - Daily cost per inmate, in dollars - $88.48
Output - Percent of inmates testing positive in monthly drug test - <=5%

Conclusion
In contrast to the budgets from Texas, Louisiana and New Mexico, someone reading Washington’s budget would not be able to identify the purpose of each program, nor would he know how to evaluate its success or failure.

Our state has made tremendous progress adopting the new priority-based budget model. Now it’s time to take the next step and improve the process to provide legislators, citizens and the media with a more transparent and accessible budget. This also means adopting true and independent performance audits. A transparent and measurable budget is the best way to ensure efficiency, economy and effectiveness in state programs, and the best way to restore critical trust in government.

Prepared by Jason Mercier & Bob Williams | Budget Researsh Analyst | 360.956.3482

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