April 2, 2013 |

Returning to ‘priorities of government’ budgeting

The fiscal cards have all been dealt and it is time for budget writers in Olympia to unveil their plans for the state’s 2013–15 budget.

The last card was the state’s March 20th Revenue Forecast. We now know budget writers will have $2 billion more in revenue for the 2013–15 budget compared to the current 2011–13 budget.

Judging from public comments, however, the way Governor Inslee and House Democrats view the expected $2 billion increase in revenue is vastly different than the Majority Caucus in the Senate.

The Senate Majority Caucus sees $2 billion more to increase spending over 2011–13 levels. Governor Inslee and House Democrats say that’s not enough, and that additional taxes are needed to close a projected $1.3 billion shortfall assuming baseline budgeting and policy add-ons. Baseline budgeting takes the current budget and automatically carries the spending forward adding increases for inflation and caseloads.

If this budget conflict sounds familiar it is because we had a similar debate 10 years ago when then Governor Gary Locke (D) decided it was time to change the way Olympia thinks about budgeting.

Here is what Governor Locke said a decade ago when announcing his Priorities of Government (POG) initiative: “We face a dilemma with our budget. We don’t want government to be any more expensive. That means an increased drag on our struggling economy. But we don’t want to compromise the quality of the vital services we provide to citizens either. State services and programs support the health of communities and the economy. One way or another, something has to give.”

Locke continued: “Past deficits have been addressed mainly by looking at the existing budget. Taxes can be raised to just keep doing what we’re doing. We know that isn’t a preferred option . . . We are convinced there is a better way. This year, we decided not to start with current spending to try to meet the forecasted revenue. Instead, we decided to look at how we should be spending our state’s money in the first place. We decided to look at our Priorities of Government.”

POG principles require agencies and budget writers to answer the following questions:

1. How much money will the state have?

2. What results do our citizens want most from state government?

3. How much money can we allocate to each result?

4. How best can we spend allocated funds to achieve the results?

The Legislature has required the Governor to use POG (RCW 43.88.030) when building his budget but has not placed the same requirement on its own budget building process.

To help legislative budget writers have access to the information they need to do full-fledged Priorities of Government, state agencies should be required each fiscal year to rank their activities as high, medium or low priority, with no more than one third of their total costs allocated to each ranking. Lawmakers should then direct agencies to identify at least one measurable performance outcome for each activity it wants to fund.

Having access to this type of information would better facilitate legislative efforts to use POG budgeting. Lawmakers would be able to determine quickly if they agree with an agency’s activity rankings and whether the expected performance outcome is worth spending taxpayer dollars.

Though daunting, the state’s budget challenges can be fixed by focusing on purchasing high-priority performance outcomes instead of lawmakers being influenced by emotional pleas for continued funding based on past spending decisions.

Priorities of Government budgeting will help reprioritize past spending decisions that have contributed to a projected budget shortfall, despite an expected $2 billion in revenue growth.

By taking advantage of POG and the expected $32.6 billion available for 2013–15, lawmakers can make informed decisions that deliver the best results for the public. If lawmakers ultimately ask for a tax increase the public will know one of two things:

1. Lawmakers believe the state’s lowest priorities are still worth funding even in this tough economic climate and taxpayers need to sacrifice more.

2. The budget is not properly prioritized and lower priorities are being funded first, resulting in the request for tax increases to fund higher priorities.

As Governor Locke said 10 years ago, “there is a better way” to budget.

It is time for the Legislature to realize this and fully embrace Priorities of Government budgeting.

Using Priorities of Government budgeting would show respect for the hard-working people of our state, and would better serve the most vulnerable that depend on essential public services.

Jason Mercier is director of the Center for Government Reform at Washington Policy Center. For more information visit washingtonpolicy.org.

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