Government Budgeting Based On Core Functions
In 2003, Ohio state officials fell prey to traditional budget solutions and raised taxes to address the state’s budget deficit. But there was another way.
Conventional thinking says lawmakers must adjust the current budget for inflation, add caseload increases, splice in a few new initiatives, and call it good for another legislative session. If revenue drops, the same conventional thinking allows for two budget balancing options: raise taxes or cut important services (or some combination of both).
A third way exists, however: priority-based budgeting. Successful government reformers have discovered the necessity of determining what we call “core governing principles.” Core principles come from a person’s or a party’s understanding of the role of government. Only after core principles have been defined and advanced does managerial and organizational excellence matter.
Similar to Ohio’s budget situation, Washington state began 2003-05 budget deliberations facing significant future deficits. But instead of struggling to maintain the state’s existing budget, which would have forced program cuts or tax increases, Washington’s Governor Gary Locke (D) decided to look for a better way. Locke determined to build a new state budget using forecasted revenue, and to wipe the chalkboard clean of previous spending assumptions. To do this, he asked and answered four very basic questions:
1. How much money does the state have?
- What is the forecasted revenue for the next budget cycle?
2. What does the state want to accomplish?
- What are the essential services state government must deliver to citizens?
3. How will the state measure its progress in accomplishing those goals?
- What will success look like?
- What measurable outcomes can be identified?
4. What is the most effective way to accomplish the state’s goals with the money available?
- If a service/program is a core function of government, what level of government should provide it?
- How can services be provided efficiently and effectively?
- How can market forces and competition be introduced into core functions, assuring costs are controlled and quality enhanced?
Using the answers to these questions, Washington’s Governor Locke and his budget team based their budget on what they call “Priorities of Government” (POG). This budget was approved without relying on new general tax increases.
As we did here in Washington state, Ohio’s lawmakers must determine what they believe are state government’s core functions. Once adopted, these serve as a litmus test for the hundreds of agencies, boards, commissions and programs currently funded. Agencies can then be asked to submit their budgets based on delivering one or more of the state’s already identified goals. If an agency or program is not advancing one or more of the state’s core priorities, it can be eliminated. This is an objective tool and much fairer than across-the-board cuts or tax increases on over-burdened citizens.
Only by carefully considering the proper role of government can state officials do a good job protecting individual rights while providing essential services to taxpayers in an efficient, cost-effective manner. This is not an “anti-government” philosophy; rather it is ensuring that what government is supposed to do, it will do well.
Some Ohio lawmakers may be unwilling to budget based on core functions of government because 1) it is hard work and may take years to get right, 2) fierce philosophical battles must be waged with the end result being a compromise that may please no one, and 3) most lobbyists and other special interests hate it because it’s new and less easy to manipulate once adopted.
Still, the ultimate responsibility of elected officials is to look taxpayers in the eye and honestly report to them that government is functioning excellently within its boundaries and its means. Starting the governing process with sound core principles and budgeting accordingly ensures this possibility.
Bob Williams is president of the Evergreen Freedom Foundation and Lynn Harsh is the Foundation's executive director and senior education analyst. This is an excerpt from their report The Stewardship Project, available at http://www.effwa.org.
