For a web site “boosting” this approach: www.psg.us
A fellow by the name of David Osborne has written a book on this approach, that I really have not seen enter into the “budget dialogue” here:
David Osborne wrote the book on outcome-based budgeting – The Price of Government: Getting the Results We Need in an Age of Permanent Fiscal Crisis – with coauthor Pete Hutchinson. In recent interview, Osborne explained, “Budgeting for outcomes doesn’t start with last year’s costs. It basically says to departments, `If you’re a department head now, each of your programs is going to put together an offer.’ And they’re supposed to give the best price they can and document the kind of results they’ll get.”
Mind you, this is more work then saying “Due to inflation, I need 5.5% more than last year for everything.” Also, for a department head/deputy to say “The program for eradicating waste kleenex turned out to be useless” is pretty much against the grain for how state governments work – all departments want to grow – and eliminating even what is not actually working or useful requires real courage in that context.
More from Osborne:
In the book, Osborne and Hutchinson wrote, “The results-based approach clears away all the games and the preoccupations with departmental needs by employing a very simple progression,” which includes:
determining the priorities of government: the outcomes that matter most to citizens,
deciding the price for each outcome, and
deciding how best to deliver each outcome at the set price.
Now, how does government determine “outcomes that matter most to citizens” when most citizens are silent? Maybe the new devalpatrick.com website will give some interesting answers…
In Snohomish County, Washington, this approach required actually creating teams of “rank and file” employees. After all, who knows better than the grunt in the trenches what kind of items work, or do not?
“I have found that I received very candid and very straightforward constructive information on how to improve efficiencies and how to improve performance by talking to my rank-and-file, front-line employees,” he said.
I note that here in Massachusetts it seems to be agency heads and other so-called “stakeholders” like the president of this, or the director of that who are asked to testify. But, really, do they know as much as the rank and file do where the money actually goes, where efficiencies are or could be, or the incremental waste occurs? I do not think so.
As the director who eliminated a $135 million county deficit stated:
In Multnomah County, Ore., line-level employees were also involved in the county’s priority-based budget process, said Budget Director Karyne Dargan. “The criteria for outcome team member is you’ve got to be a good thinker, you’ve got to be able to think bigger,” she said.
“Oftentimes, you find that the rank-and-file guys and the citizens at-large ask the best questions. We are reaching down. We have case managers, line staff, librarians, nurses – they make fabulous team members.”
Reardon said he identified staff members who knew how programs worked at the level at which services are provided to citizens – to align budget outcomes with the things that citizens valued most. He looked for people who “could make an articulate judgment as to what would be beneficial or problematic.”
Just imagine….
but sometimes it’s hard to measure outcomes.
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I’ll take a simple example: funding sidewalk repair.
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Now, who does sidewalk repair benefit in an urban community? Well… * anyone who walks gets a direct benefit. * a small number of people (physically disabled) get a huge benefit because they can’t use cars at all or the MBTA very easily * drivers get a small indirect benefit because there are fewer cars on the road since more people can walk * public health benefits slightly from increased fitness and reduced trip & fall injuries * the environment benefits slightly from less gasoline burned * school budgets that don’t have to fund as many busses benefit
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At the same time, if they slashed the budget for sidewalks to $0 one year, what’s the cost? Slight depreciation of overall sidewalk quality — a few more trip hazards pop up.
So, how do you measure all of this value? The cost side is easy — square yards times cost per yard. I don’t have any idea. I do believe that the $200,000 my town spends each year on sidewalks isn’t enough, since we’ve got too few curb cuts, too many trip hazards due to tree roots, and places where there isn’t a side walk and should be.
…what are our Obligations?
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What monies have we already promised – to bond holders, to those who qualify for entitlement programs, to futrue year expenditures for things like Ch. 90 road money that aren’t all spent in one year, to mulit-year Federal programs – those assumed obligations usually top 50% of revenue in any given year.
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Zero based budgeting AFTER obligations are dealt with is a good thing. Right now, there is no reward for something as simple as shutting off the light switch when you leave the office. Some do, some don’t, based on temperment – and there neeeds to be a recognition of those who DO seek to save the state money.
Is there a good source for the “contractual” fixed cost obligations already in place? That is a valid point, Madam Procupine.
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Just as with the so-called “lead agencies” that DSS under Spence has added – the grunts tell me in private that this is just another layer of management and not economical, and bleedings from the services budget….
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But I am pleased to say some of those “grunts” actually did show up and testify about this.
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On that one issue, according to testimony I was present for and heard, the “lead agencies” are costing more than the entire line item for social worker salaries.
You could probably get a schedule of bonded indebtedness from the Comm. on Long Term Debt – but even that is flexible. The $60 million that Patrick appropiated this week to EOT was to retire high interest bonds – so that is subject to some change. However – the bond cap gives you a total.
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It will be WICKED hard to decipher entitlements, as the rules are being deliberately changed to accommodate the health care law. Thinks like Insurance Partnership, even increased Medicaid availability – it will be hard THIS YEAR to do a good comparision, as the past data will be incomplete.
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I would look at ANY budget line that increases more than 10% and say – how come?
The problem with all budget systems – be it Zero Based Budgeting, Management By Objectives, Priority Based Budgeting of whatever is the fad for this year – is that someone has to sit down and determine what the agency does, what it should be doing, how much it is going to cost to do the mission. The people that can do this in the agency are usually the same that wish to bloat the organization. Further, cost of government is mostly in the employee expenses. Just try and cut Uncle Lou’s job or Aunt Bea’s!
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How many times have we seen cuts in the social service departments where the agencies eliminate the social workers and keep the managers. “Throw away the wheat and keep the chaff.” Government agencies are about getting and keeping your job. Not providing a service.
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All change is from the outside. If you want cost savings, you’ve got to do audits from outside the agencies.
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Another way to slowly get out of the “Uncle Lou & Aunt Bea” dilemma is hiring freezes, which we see when the budget is tight for a number of years in a row. New hires are frozen except for key essential positions.
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The Uncle Lous and Aunt Beas eventually retire, if only some of them at a time. Hopefully, every few years the organization re-establishes its staffing needs. They might not get rid of Aunt Bea’s position while she still works there, but once she retires her position may disappear.
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It sure isn’t efficient or effective, but if these sorts of job protection schemes are happening, new hire freezes can shake out some of the inefficiency over time.