|
Ronald ReaganÕs approach in 1982 was a classic example ofchanged the rules of the budget game. His success has inspired
<br />others to follow. The City of Spokane and Snohomish County, in
<br />making the budget ÒworkÓ by working the assumptions. To justify
<br />massive tax cuts, his budget director, David Stockman, forecast 5Washington, the cities of Azusa and Los Angeles, in California, and
<br />the State of Iowa have all embraced Budgeting for Outcomes. The
<br />percent growth for 1982. According to Òsupply sideÓ theory, this
<br />State of Washington is now completing its second budget using
<br />would help create a $28 billion surplus by 1986. As it turned out,
<br />these principles. ÒOne of the lasting achievements of Gov. Gary
<br />the gross domestic product fell by 2 percent in 1982Ñand the
<br />Locke should be to make permanent the budget process he used
<br />largest deficits since World War II soon followed. In his memoirs,
<br />two years ago,Ó the Seattle Times recently editorialized. ÒThe state
<br />Stockman admitted that the entire effort, sardonically nicknamed
<br />is using it again, and it needs to keep using it after he is gone.Ó
<br />Òrosy scenarioÓ by White House insiders, was a sham.
<br />The following steps constitute the core of Budgeting for
<br />Too often, the political
<br />Nickel and diming employees.
<br />Outcomes:
<br />response to budget problems is symbolic. Leaders order coffee
<br />Establish up front how much
<br />1.Set the price of government.
<br />pots unplugged, travel budgets slashed, and consultants banned.
<br />citizens are willing to pay for the results they want from government:
<br />To save energy, they force workers to endure hotter offices in sum-
<br />what percent of their personal income they are willing to devote to
<br />mer and colder offices in winter. Some even outlaw potted plants.
<br />taxes, fees, and charges. Every jurisdiction has its own price, and it
<br />In one state last year, the governor ordered that every other light
<br />is usually quite stable over time. The price of government for the
<br />bulb in government buildings be unscrewed. While such actions
<br />U.S. as a whole, including all federal, state, and local governments,
<br />may send a message, they have two critical consequences: they
<br />has averaged about 36 percent of personal income for the last 50
<br />donÕt save much money and they kill morale.
<br />years. History is a good guide, since leaders must ensure that the
<br />price they set is acceptable, adequate, and competitive.
<br />Delaying maintenance and replacement of assets
<br />When our personal budgets get tight, we
<br />(and relying on hope).
<br />Define the outcomes
<br />2.Set the priorities of government.
<br />sometimes donÕt take our car in for its regular oil change, or we
<br />that matter most to citizens, along with indicators to measure
<br />donÕt fix the crack in the driveway. We can save a little money now,
<br />progress. Citizens donÕt think in terms of programs or activities
<br />but if a missed oil change leads to overheating, we can crack the
<br />(and certainly not in terms of departments). They want resultsÑ
<br />engine block. The people who make Fram oil filters said it well:
<br />things like safety, jobs, and health. Elected officials need to find
<br />ÒYou can pay me now or pay me later.Ó
<br />out and articulate what matters most to their constituents, using
<br />many of the same methods they use to get themselves elected:
<br />Fiscal illusions may help our leaders solve the math problem
<br />PollingÑrandom sampling of public opinion.
<br />and claim that their budgets are balanced. But they fail utterly to
<br />address the real problem: how to deliver the results citizens want
<br />Focus groupsÑmultiple discussions with randomly
<br />at the price they are willing to pay.
<br />selected participants.
<br />So does the other common dead horse solution: across-the-
<br />Town hall sessionsÑmultiple public discussions with
<br />board cuts. Across-the-board cutting allows us to avoid the hard
<br />whoever shows up (facilitated by experienced staff).
<br />work of making choices, but it is nothing more than thinning the
<br />Civic journalismÑnews media initiatives to engage readers,
<br />soup. Every time we use it, we pretend that everything our organ-
<br />listeners, and viewers in interactive discussions, debates,
<br />izations do is equally valuable to our citizens. We also pretend
<br />and feedback about priorities.
<br />that they wonÕt notice. Done enough times, thinning the soup
<br />Web sitesÑfeedback collected in response to efforts to
<br />makes government services distastefulÑcontributing directly to
<br />heighten awareness.
<br />lost citizen confidence.
<br />Generally, you should select 10 or fewer outcome goals. In the
<br />end, these priorities should be expressed in citizen terms using
<br />BUDGETING FOR OUTCOMES
<br />indicators that citizens would use to assess progress. In choos-
<br />In 2002, Gov. Gary Locke of Washington concluded that it was
<br />ing indicators:
<br />time to find a new horse. He turned traditional budgeting on its
<br />headÑaccepting the challenge of delivering results citizens val-Include both subjective and objective measures (citizen per-
<br />ued at the price they were willing to pay. In so doing he literally
<br />ceptions of safety and the crime rate, for example).
<br />October 2004
<br />12Government Finance Review
<br />|
<br />
|