POLICY HIGHLIGHTER

Volume 15, Number 4
January 24, 2005

House focusing on Priorities of Government (POG)

To the credit of Speaker Frank Chopp (D) and a long list of bi-partisan House members, 2005 is shaping up to be the session of budget accountability in the House. Speaker Chopp has indicated a comprehensive and independent performance audit bill will be fast tracked to passage. Along with this effort, a bill has been proposed in the House to put into law the common sense Priorities of Government (POG) budget model.

The POG process helps focus the budget around four key principles:

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 the executive branch has used POG to varying degrees over the past few years, the process had not been required to be tied directly to the budget appropriations. HB 1242: Focusing the state budgeting process on outcomes and priorities aims to make just such a requirement.

HB 1242 would add the following new section to the state's Budget and Accounting Act (RCW 43.88):

The legislature finds that agency missions, goals, and objectives should focus on statewide results. It is the intent of the legislature to focus the biennial budget on how state agencies produce real results that reflect the goals of statutory programs. Specifically, budget managers and the legislature must have the data to move toward better statewide results that produce the intended public benefit. This data must be supplied in an impartial, quantifiable form, and demonstrate progress toward statewide results. With a renewed focus on achieving true results, state agencies, the office of financial management, and the legislature will be able to prioritize state resources.

HB 1242 also contains the following requirements in regard to the state's budget process:

• The governor shall communicate statewide priorities to agencies for use in developing biennial budget recommendations for their agency and shall seek public involvement and input on these priorities.

• [Agency] Objectives must specifically address the statutory purpose of the program or activity and focus on data that measure whether the agency is achieving or making progress toward the purpose of the program or activity and toward statewide priorities.

• The office of financial management shall regularly conduct reviews of selected programs or activities to analyze whether the objectives and measurements submitted by agencies demonstrate progress toward statewide results.

• In reviewing agency budget requests in order to prepare the governor's biennial budget request, the office of financial management shall consider the extent to which the agency's programs demonstrate progress toward the statewide priorities, identified by the governor and the legislature...

• The biennial budget document or documents shall also describe accountability indicators that demonstrate measurable progress towards priority results.

• The governor's operating budget document or documents shall reflect the statewide priorities as required by RCW 43.88.090. The governor's operating budget document or documents shall identify programs that are not addressing the statewide priorities.

HB 1242 appears to partially address the recommendations of the Joint Legislative Audit and Review Committee (JLARC), which last year suggested the legislature do the following concerning POG:

1. Set statewide priorities and targets by publishing an annual "state-of-the-state" report.

2. Focus on outcomes by routinely requesting and using "performance information in policy and budget decisions."

3. Take a more active and direct role in agency activities and decisions.

4. Base legislative committee decisions on performance outcomes by structuring committees around the state's governing priorities (EFF agrees this reform is urgently needed to maximize the benefits of POG).

Due to the bi-partisan support of HB 1242 as demonstrated by the bill's sponsors, there is great potential for these POG reforms becoming law. One possible obstacle is the last section of HB 1242, which makes the reforms null and void without specified appropriations in the 2005-07 budget. This section of HB 1242 is unnecessary as the reforms implemented by the bill should be considered the core function of the Office of Financial Management in overseeing the budget process.

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. While our state has made tremendous progress adopting the new priority-based budget model, it is 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 | 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