2004 INNOVATIONS AWARDS PROGRAM Application Form

Transcription

1 1. Program Name Priorities of Government (POG) 2004 INNOVATIONS AWARDS PROGRAM Application Form 2. Administering Agency Washington State Office of Financial Management 3. Contact Person (Name and Title) Wolfgang Opitz, Deputy Director 4. Address P.O. Box 43113, Olympia, WA Telephone Number (360) FAX Number (360) Address 8. Web site Address 9. Please provide a two-sentence description of the program. Priorities of Government (POG) is an innovative budgeting approach used in Washington state to develop a results-based budget by which 1,400 activities of state government are reviewed and prioritized within ten measurable goals. 10. How long has this program been operational (month and year)? Note: the program must be between 9 months and 5 years old on May 1, 2004 to be considered. Governor Locke implemented this program in August 2002, and it continues through the present day. 11. Why was the program created? (What problem[s] or issue[s] was it designed to address?) It was created to address a $2.6 billion state budget deficit for Halfway through the biennium, Governor Locke and the Legislature had already cut $1.5 billion and eliminated 1,340 jobs. No easy choices remained to plug this new, larger deficit. The traditional approaches to budgeting seemed inadequate - - 1

2 to address the size of the fiscal problem without seriously weakening remaining government functions or increasing public cynicism. We identified a number of objectives for a new approach to budgeting: To address the financial situation by slimming state government to a set of core services that makes sense and the ability to describe what we did with confidence. To better understand and explain what state government does and accomplishes. To break free from the agency focus and move to a truly statewide perspective in building the budget. 12. Describe the specific activities and operations of the program in chronological order. The Priorities of Government approach focused on answering four key questions: How much are citizens willing to spend? What results do citizens want for their money? How much will the state spend to achieve each of these results? How best can that money be spent to achieve each of the core results? The effort was implemented in four stages in ten short weeks: (1) A guidance team set the price of government by determining what Washington citizens were willing to spend. (Governor Locke chose to build the budget on expected revenues, with no tax increases.) (2) The guidance team and a staff team set the priorities of government or the key results that citizens most wanted from state government. They are: Improve student achievement in elementary, middle and high schools; Improve the quality and productivity of the workforce; Improve the value of a state college or university education; Improve the health of Washington citizens; Improve the security of Washington s vulnerable children and adults; Improve the economic vitality of businesses and individuals; Improve statewide mobility of people, goods, information, and energy; Improve the safety of people and property; Improve the quality of Washington s natural resources; and Improve cultural and recreational opportunities throughout the state. Improve the ability of state government to achieve results efficiently and effectively. (This result area was added for the budget cycle.) (3) The guidance and staff teams allocated available resources across the ten results areas based on perceived value to the citizens, not by an analysis of past practice. (4) Teams of agency subject matter experts were organized around each of the ten results. Team members were asked to set aside their agency focus and to don a citizen hat in the process. Their first task was to identify key - - 2

3 indicators that would measure, from the citizen point of view, whether or not we were achieving the result. (5) Teams then developed maps of the key factors influencing the result. These maps served as the basis for identifying the high-level purchase strategies or investments the state should pursue in order to maximize the results to the citizens. (6) The teams then developed a purchasing plan for each of the result areas with the allocation they received from the Guidance Team. These plans indicated (a) what activities they would buy now; (b) Which activities they would buy next, in priority order, if they had more money; (c) what they would eliminate first if they had less money; and (d) what they would not buy. Teams were told not to worry about fund source and other constraints, but to ensure their plans met the test of evidence that the activities selected were the most important ones to purchase to achieve the result. Using these and similar rankings provided by state agencies, the guidance and staff teams made final recommendations to Governor Locke, who then closely followed the purchasing plans in finalizing his budget proposal. 13. Why is the program a new and creative approach or method? This approach goes beyond the traditional incremental budgeting approach of making relatively minor adjustments to a large and largely unexamined base. The traditional approach focuses almost solely on the incremental changes and the programs in which they occur. In a manageable and easily explainable way, this approach enabled us to look at the entire state budget. Some key elements: The approach gives decision-makers and citizens a better understanding of what their state government actually does. We used a budget building block called the activity. Activity descriptions describe the discrete things an agency does what they do, for whom, why, and what they expect to accomplish. We ask agencies to describe them as they would to their grandmother. These building blocks were then sorted by result area. Rather than only looking at the Department of Health and the Department of Social and Health Services view of the world, we could see every activity the state performs that contributes to improving the health of Washington citizens. It helped us get out of agency silos and to focus on whether we were maximizing the results we could deliver to citizens for the money. The team process helped us develop lists of activities for each result area, prioritized by their contribution to achieving the result. While the process did not make our $2.6 billion budget problem disappear, it did help us explain our proposal to address it. It put the proposed budget cuts in context of what we were keeping. Our communication materials included summarized lists that showed the activities and results we were still buying above the line, and the - - 3

4 proposed cuts below the line. The format helped engage the Legislature, stakeholders and citizens in a more meaningful discussion than the usual critique of the incremental changes. It was clear that if state revenues stayed the same, one would have to trade something above the line to restore a cut below the line. While not everyone agreed with the proposed cuts, it was easy to see that they were credible, reasonable choices when compared with the services retained. This framework is making performance information more consequential. Agencies more clearly experience the budget process as a competition. In order for an activity to be purchased, it must demonstrate a contribution to a result. The approach also helps facilitate thinking about trade-offs above and below the line and across the results areas. Does the budget make sense as a whole? This approach helped the Governor perform this statewide budget balancing more easily than before. The logic of the list also helps frame these questions, Why does the line have to be drawn here? Do we know we are buying things at the best possible price? It is helping us move from random acts of quality to improvement efforts focused on the high-contribution-to-results activities that we know we want to purchase. Making these important activities more efficient will free up resources to purchase other important results. 14. What were the program s start-up costs? (Provide details about specific purchases for this program, staffing needs and other financial expenditures, as well as existing materials, technology and staff already in place.) Approximately $200,000 in consulting costs. Otherwise, we used existing staff and resources. 15. What are the program s annual operational costs? There are no incremental operational costs. Instead, we changed our previous budgeting process. 16. How is the program funded? Because developing state budgets is a core function of the Office of Financial Management, funds are appropriated from the state general fund for this purpose. 17. Did this program require the passage of legislation, executive order or regulations? If YES, please indicate the citation number. No. Governor Locke used Priorities of Government in developing his budget proposal. 18. What equipment, technology and software are used to operate and administer this program? - - 4

5 We use existing computer resources in the Office of Financial Management. A new software application was developed to support the new activity inventory reports. 19. To the best of your knowledge, did this program originate in your state? If YES, please indicate the innovator s name, present address, telephone number and address. Yes. Governor Locke, Fred Kiga (former chief of staff to Governor Locke), and Marty Brown, director of the Office of Financial Management. Marty Brown PO Box 43113, Olympia, WA (360) marty.brown@ofm.wa.gov 20. Are you aware of similar programs in other states? If YES, which ones and how does this program differ? We have been contacted by many jurisdictions inquiring about the POG process, and we understand a number of states are either considering or are in some stage of implementing this approach. 21. Has the program been fully implemented? If NO, what actions remain to be taken? Yes. It was fully implemented in the biennium and we are using it again, modified and enhanced based on our lessons learned from the first effort, in developing the budget). 22. Briefly evaluate (pro and con) the program s effectiveness in addressing the defined problem[s] or issue[s]. Provide tangible examples. - POG was very successful in addressing the $2.6 billion budget deficit in the biennium. The Governor proposed a budget which cut spending and proposed no general tax increase. - It established a clear set of results that citizens can expect from state government and maximized spending to achieve those results. - It required agencies to better identify and describe their activities, and indicate the proposed cost and expected results for each one. - It helped citizens better understand the services provided by state government, for whom and at what cost. - It elicited far more strategic thinking about the best uses of public funds. Examples include the health team which decided the highest impact strategies focused on prevention (such as providing public health clinics and improving food sanitation) and proposed spending more on such items and less on health insurance for childless adults; the higher education team which decided to use some of its funds to pay for better K-12 education to improve the educational competencies among its incoming students; and two teams which jointly bought improved water quality, to leverage both health and natural resources outcomes

6 23. How has the program grown and/or changed since its inception? We are just beginning Priorities of Government II to develop Governor Locke s budget proposal. We have added one additional result area for a total of eleven measurable goals. OFM has modified the state budget development systems to better support the POG process. The Legislature has embraced this approach, and in fact, has subsequently made it a statutory requirement for OFM shall continue to report on the ten general priorities of government upon which the biennial budgets will be structured. (Section 128(2) of the operating budget) 24. What limitations or obstacles might other states expect to encounter if they attempt to adopt this program? While many were skeptical of this new budgeting approach because it had not been used before, it was well received by the media, Republican and Democratic legislators, and many interest groups. This skepticism and fear of the unknown was probably our biggest obstacle, and in some ways, our biggest advantage in implementing something so new. These elements would no doubt be present in any other state as well. [For more information about Priorities of Government, we have attached an article recently published in Spectrum.] Add space as appropriate to this form. When complete, return to: CSG Innovations Awards 2004 The Council of State Governments 2760 Research Park Drive, P.O. Box Lexington, KY innovations@csg.org DEADLINE: All original applications must be received by April 20, 2004, to be considered for an Innovations Award for ApplicationForm04.doc - - 6