Budgeting for Outcomes

Posted by Anon at 10:59pm Apr 20 '10
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I like this. It sounds very, uhm, intelligent.


Californians are sick of watching their leaders kick the state's fiscal problems into the future. They are also tired of sterile debates about how much to spend on X vs. Y, with no attention to the results these expenditures produce or the long-term liabilities they create for the state.

One big factor contributing to fiscal paralysis has been the two-thirds requirement, in both houses of the Legislature, to approve a budget. Yet without some other form of fiscal discipline, citizens are not likely to consider repeal. To create that discipline, California's elected leaders might consider a new approach, called "Budgeting for Outcomes." It helps leaders rank programs according to how cost-effective they are at achieving the results citizens want, then eliminate the low-ranked activities.

The Public Strategies Group developed this approach to help Washington Gov. Gary Locke close a nearly 15 percent budget gap in 2003. Since then, it has spread to more than 20 other states, cities, counties and school districts.

As with other reforms, its success depends on leaders' courage to make hard choices. But it can help them make those decisions in a more rational and transparent way.

It starts where most budget processes end: Elected leaders decide how much they want to spend next year. They make a policy decision, up front, whether to raise or cut taxes and fees. (They can revisit this decision at the end of the process, of course.) Then they work with citizens to define the eight to 10 results most important to them – a better economy, better schools, better health, better safety, better mobility, a cleaner environment, and so on. They decide how much each of these outcomes is worth and divide the money among them.

This creates eight to 10 finite pots of money, for which programs must compete based on their value, the results they produce per dollar. This is the real magic: Competition for scarce resources forces creativity.

For each pot of money, leaders assign a team of experts with no ax to grind or budget to protect. These "results teams" act as buyers for the citizens. Their task is to produce the outcome, not to fund programs.



I still think the bulk of our problems are related to federal incompetence regarding how to generate income and disperse the booty, but if the states and localities were more ordered it would certainly improve the country and maybe even help force change from bottom to top?


I've also been coming around to the idea of making State's responsible for income tax burdens instead of having individuals do it. What if each State collected it's set tax burden that initially correlated to the amount of income tax that was generated in that State in the last year + COLA and then had to pass it up to DC? That gives creative or forward thinking States the option to tinker with flat taxing or fair taxes as they wish, which may be better in some situations. Moreover, it also gives more power to the taxed. States will fight DC to not take so much taxes from them each year with a much bigger stick than disorganized citizens scattered about over a massive land mass and 50 separate States. Yet citizens also have a much louder voice while speaking in State than they do in trying to be heard in DC.


And yes, I'm aware that some people want the US to feel like one big federation of government with consistency everywhere (except re: pot, stricter environmental laws, etc.), yet remember that this isn't really a point against the State's rights concept since we are hinging it on the sole point that things shouldn't be the same across such a large and diverse place. That's disagreeing with a point and using the disagreement as the counter-point.


Link to more on the cool Budgeting for Outcomes below...

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