POLICY HIGHLIGHTER

Volume 14, Number 13
May 20, 2004

DLC renews call for outcome-based budgets

During Washington's original 2003-05 budget debate on how to close a multi-billion dollar deficit without raising taxes, the Democratic Leadership Council (DLC) quickly highlighted Governor Gary Locke's Priorities of Government (POG) budget model as the key to gaining control over state budgets.

Locke's POG process called for budget writers to ask and answer the following questions:

1) How much money does the state have? (What is the existing and forecasted revenue?)

2) What does the state want to accomplish? (What are the essential services we must deliver to citizens?)

3) How will the state measure its progress in meeting those goals?

4) What is the most effective way to accomplish the state's goals with the money available?

While such budgeting may appear common sense to those currently overseeing family and business budgets, it is a dramatic change from the way states have operated in the past. With state budget deficits resurfacing and the prospects for tax increases very real, the DLC is renewing its call for state officials to abandon budgeting as usual and instead focus on results using the taxpayer friendly option of budgeting for outcomes.

In the May 7 edition of its Blueprint Magazine, the DLC notes:

That citizens want value for their money is no mystery. We all want as much value as we can get from each dollar we spend—including what we spend on government. The price and value of government are up against the price and value of housing, food, clothing, health care, and countless other goods and services that meet people's needs. The price of government is limited, therefore, by the value that citizens want—and get—from government, compared with the value they want and get elsewhere. Government can compete—and stay relevant—only by delivering more value per dollar. But the only way to accomplish this is to reinvent the way we do the public's business. Our public institutions must learn to work harder, but more important, they must learn to work smarter.

Though Washington already has in place the type of budget foundation that the DLC is eloquently advocating, more must be done to institutionalize this reform to ensure it is lasting. For starters, the legislature must begin to take active ownership of the POG process.

A Joint Legislative Audit and Review Committee (JLARC) study recently highlighted this fact. In part, JLARC warned:

In order to be successful, government reform must include the executive branch, which defines strategies and approaches, and the legislative branch, which determines spending priorities. The Governor's "Priorities of Government" could be a stronger tool with the input and support of the Legislature. Indeed, the Governor's efforts must not supplant the Legislature's responsibility to set state government priorities.

There is no reason why the legislature could not begin this process now, leaving the next legislative session to adopt the budget process around the reforms achieved this summer.

EFF recommendations
To bring about the type of lasting changes to our budget system that the DLC advocates and the taxpayers desire, legislators should consider the following:

1) Approve its state priorities. While each party may have different priorities, public hearings should be held to help shape the overall legislative and state POGs on which to base the 2005-07 budget. Governor Locke has already identified his priorities for the next budget cycle. If the legislature agrees with these it should pass a resolution accepting these POGs as the outline for the next budget or change them as necessary.

2) Legislative policy committees should agree on and approve the mission statements of key agencies under their jurisdiction. Agency mission statements are critical to the success of the POG process as they serve as the filter for all agency activities.

3) Legislative policy committees should also identify and approve the key performance indicators for major agency activities. These indicators should be directly tied to agency mission statements in order to demonstrate how the POG is being accomplished. In the 2005-07 budget, these indicators should be directly written into the budget (please see EFF PH 13-30).

4) Once the POGs, agency mission statements, and performance indicators have been adopted, the legislative policy committees should be restructured to represent each of the identified POGs. Then the Senate Ways and Means and House Appropriations Committee could assign a budget amount to each POG committee. This will allow the POG committees to approach legislation and funding amounts in the context of their specific priorities. By doing this, policy committees will not be recommending bills absent the fiscal implications on the state's overall outcome driven budget. This will also enable every legislator to have ownership of the budget and the state's priorities.

Prepared by: Jason Mercier | Budget Research 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