Time to Perform

Last November, State Representative Lucy Mason, a Republican, wrote an Op-Ed for the Arizona Republic, titled: State legislators need to rethink budget options.  In it, amongst other suggestions, she floated the idea that state agency budgets include programs in order of priority, along with it a citation of the statute justifying the program’s existence, this way lawmakers could cut agency budgets by working their way up the list.

I agree with Rep. Mason, but I would take it a few steps further: require each state agency head, or an agency representative, to come before a legislative committee to introduce each program, cite the statute, explain the program’s goals and objectives, and then demonstrate whether the program had performed as expected. Funding, or funding cuts, would be based on how well a program succeeded in meeting its objectives. This would be Arizona’s introduction to a performance-based budgeting system.

For most of us, judging something by its performance is normal, it is how we go about life, be it buying a car, picking an American Idol winner, or keeping our jobs. But in government, giving a program a clear cut objective and then judging its performance is not normal.

There are a few reasons why: First, it cuts both ways, challenging both Democratic and Republican ideological dogma. Second, it is exhaustive and demands accountability from top to bottom, from agency head (a political appointee) to the guy who stands around the water cooler all day. Lastly, it is painful for people (i.e. legislators) to see programs that they believe in and want to succeed, fail miserably and squander taxpayer money.

“You mean that’s not happening now!” is most people’s reaction when you tell them about performance-based budgeting, but it is NOT happening now. The way the budgeting process is suppose to work—from what I can tell—goes like this: the Governor lays out her budget proposal, a Joint Legislative Budget Committee (JLBC) consisting of legislators from both houses along with non-partisan JLBC staff estimate what the budget will cost, agency budget hearings are held before the Appropriations Committee, and budget recommendations are finally considered by the senate and house, respectively (see page 49 of New Legislator Orientation).

Unfortunately, our state budgeting process is at the point of such dysfunction that for the past few legislative sessions the Majority leadership (who happen to be Republican) have hammered out a budget behind closed doors and then presented the budget to everyone else: Democrats, the media, and the public. Essentially, at this point Republicans are then expected to vote in favor of the budget proposal, and Democrats are largely left out.

It is true, committee meetings are held, but any questions about program performance, results, or objectives are hardly a priority. For an edgier and more partisan take on the current budgeting process see Craig McDermott’s recent blog posting: Lege 101 – Committees, in theory and in practice.

Performance-based budgeting is not my idea nor is it a new idea. In fact, Indiana, Utah, Virginia, and Maryland are all using some form of it.  I should point out that these four states are Arizona’s competitors for businesses, jobs, and economic development, but that’s another issue. A recent publication by The Pew Center on the States, Trade-off Time: How Four States Continue to Deliver, demonstrated how these four states, while dealing with the severe economic downturn, are able to make smarter, more informed, and ultimately less hurtful budgets cuts because of performance-based budgeting.

The payoffs of such a system are simple and straightforward. A program’s funding would be based on its ability to meet its objective and fulfill the agency’s mission, thus saving the taxpayer money. As legislative and public scrutiny increased, state agencies would refine and innovate new ways of delivering services—Utah’s state agencies adopted a 4 day/10 hour week, maybe we should too. Furthermore, the demand for accountability would permeate into a state agency, improving the workplace culture and the level of personal responsibility of each state employee.

If a reduction in an agency’s budget was called for, a director could strategically target programs which were not quite meeting expectations, or give the director the flexibility to cut a program out entirely to comply with the requested reduction, while moving some of the extra savings to programs which had shown success. Such a strategy would also serve our state’s government in the long term; as the economy improves our state’s population will grow, expanding the need for certain services and decreasing the need for others, having used performance-based budgeting agencies will know what worked in the past and what did not.

In closing, the recent political undercurrent is simple: people have lost confidence in government. I hear it all the time, whether I’m knocking on doors or making new friends at Starbucks: “Politicians have forgotten about us, the People.” What better way to rededicate Arizona’s government to its citizens than by demanding accountability at all levels and assuring that the People get the most bang for their buck. The lasting payoff of a performance-based budgeting process would be the renewal of public confidence in our state government, its employees, and elected officials. Politicians should never forget, that while they may not embrace the idea of demanding results and improving performance, voters do, and they do it every two years with a ballot in their hand.

Victor Jett Contreras

Photo Credit: Flickr